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	Here’s the place to get the answer to all your real estate related questions. If you have a question please email, it will be added to our FAQ or you will get a personal reply. Email Lynn for an answer to your question
Should I pay points to get a better interest rate? Generally, it is not in your favor. Points are basically interest paid upfront. Why would you want to pay money up front? More often than not, paying a point amounts to more than your entire first year’s principal. Looking at it from that point of view, you would be better off to apply the same amount directly to the principle amount of the loan. Back
What are points? Under FHA-insured or VA-guaranteed loans, discounts of points paid to lenders are, in effect, prepaid interest and are used by lenders to adjust their effective interest rate so that it is equal to or nearly equal to the prevailing market rate (the rate charged on conventional loans). The sellers absorb the discounts. One point is one percent of the loan amount. On FHA-insured and VA-guaranteed loans buyers may be charged only one percent "service charge". This restriction does not apply to conventional loans. Under conventional loans the charge for making a loan at most institutions is usually called a "loan fee", "service charge", commitment fee" or may be referred to as "points to the buyer. Back
What is difference between points and origination fees? Points and/or origination fees are, usually paid to get a better interest rate. Points are interest paid upfront. Origination fees are fees paid directly to the lender for originating the loan. The big difference, points are tax deductible, origination fees are not. Back

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