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What is the difference between points and loan discount?

I am confused. I got this quote that says no points but there seems to be over 1 point. 

The ID is ZQ-FSLFZYP and the say  WE DO NOT CHARGE ANY POINTS OR ORIGINATION!

What am I missing?




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August 03 2011 - San Diego
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Answers (5)

Hi jpatt371,

Thank you for using Zillow Mortgage Marketplace to shop for mortgage quotes.  Excellent question you have asked.

If you question any quotes that are posted on Zillow your more then welcome to flag the quote.  Listed below is the icon you would click on if you wanted to flag the quote.  After you click the flag icon, you would select a problem, provide details, enter your email, then click submit. 



After you click submit we look at the quote flag and investigate. 
I hope this helps and if you have any other questions please let us know.

Candace
Zillow Customer Support
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August 19 2011
I'd suggest that you contact 3 to four local lenders or brokers here in San Diego.  Let them explain your options to you, and stick with the one whom you feel the most comfortable with based upon your discussions.

Good luck on your search.
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August 04 2011
To answer your question directly:  There is no difference between points and loan discount.  The words can be used inter-changed.  However, a point can be either origination or discount point.  Origination is the compensation to the mortgage professional and discount is a fee you are paying to lower the interest rate below a par (zero point) rate.  

@ Justin may be right; however, I hope not because that would imply that you have nothing more than spam mail for a rate quote.  

I agree somewhat with Cory's comment.  Not so much that rates don't matter as much as the quote is only good the moment it is being given and IF your application is in the system and ready to be locked.  Lender fees vary dramatically in San Diego county...I have seen many with lender fees at nearly $2000!  I find that ridiculous.  If you are shopping for a refinance I can provide exact title/escrow fees; however, if you are purchasing the title/escrow companies are provided to me by you and/or the agents...in other words, I have no control over what their fees are.

Moreover, shopping for a mortgage by rate can really lead to a consumer paying much more than necessary over the life of the loan.  The first questions should center on your goals so your mortgage professional can provide you the knowledge to allow you to make an educated decision.

Most lenders are going to be "in the ballpark" on rate, as Cory stated.  However, structuring a loan incorrectly can cost you far more over the life of the loan than a 1/8% difference in rate or $200 in closing costs.  Ask for comparisons, ask for clarity and demand authenticity.  Of course, you can contact me if you want all of the above.
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August 03 2011
Or maybe the lender is trying to mislead you. What you can do is get an estimate of all fees and points form 3 lenders for the same property. Using the same loan with the same purchase price will let you compare apples to apples. Then you can compare each lender's fees, and you'll have a much better idea of what they're charging, and probably a lot more questions regarding the fees you do see. Call them and ask them to explain their fees. And, don't shop the interest rate, they'll all be competitive to get your loan if you're a good borrower, and the rate changes several times a day anyway. When you lock in your interest is when you'll want the lowest rate, and by then, you'll hopefully be with the lender with the lowest, or at least, most transparent fees.

Good luck!
Cory
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August 03 2011

If a Loan Discount is being charged, then points are being charged to secure that rate.

I suspect the lender quoting just blasts that message on all their quotes, and if you contact them, they will be happy to show your their "Zero Point" rate.  

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August 03 2011
 
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