Phillip E Mi…, Home Buyer in Philadelphia, PA

what are points and what does Fees intail.?

Asked by Phillip E Mims, Philadelphia, PA Thu Feb 24, 2011

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Joseph Cafie…, Mortgage Broker Or Lender, Philadelphia, PA
Thu Feb 24, 2011
Philip..Discount points technicaly are prepaid interest that is paid in advance. In return you are offered a lower rate. Depending on how long you will be in the home will determine whether it makes sense or not. I assume by "Fees" you are talking about the extra junk fees lenders charge such as underwriting and/or processing. It is important to take the total of these into account when comparing one lenders offer to another. Would be happy to discuss this further with you.

Joe Cafiero
Superior Home Mortgage
610 594-6611
1 vote
Bruce Lang, Agent, Philadelphia, PA
Thu Feb 24, 2011
Without seeing a good faith estimate it's hard to answer. Fees usually impure appraisal fee, underwriting/application fees etc. It may also include FHA fees/mortgage insurance or prepaid interest. If you are applying for an FHA loan you should see a lot of consistency but should shop around. When younget a gfe (good faith estimate) you can see apples to apples
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Alan Openshaw, Mortgage Broker Or Lender, Southampton, PA
Thu Feb 24, 2011
Hello Phillip,

Points are computed as a percentage of the loan amount. On a $200,000 loan, one point is $2000 and on a $300,000 loan one point is $3000. Whether you are using a bank or a broker, than can charge you points in exchange for providing you with a lower rate. All lenders have different fees so it is important to compare offers from different lenders.I can provide you with a loan where you can pay 3, 2 1 or no points and also offer a loan with no costs at all. It is important to look at different options to see what suits you best. In most cases I suggest that you try to minimize the costs of the loan rather than lower the interest rate. The reason that I say this is historically the average length of time that people stay in a mortgage is 7 years. If you pay a point to lower the rate by 0.25% it may take 7 years for that lower rate to save you the amount that it cost. Unless you are positive that you are staying in that house for a long time, keep thecosts down to a minimum
Please feel free to call me if you have any questions
Best Regards,
Alan Openshaw
Cornerstone Lending Inc
720 Second St Pike Suite 104
Southampton Pa 18966
Office 215 953 0800
Fax 215 953 1706
Cell 267 992 7276
Voted Best of Bucks 2010
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Spirit Messi…, Agent, Tucson, AZ
Thu Feb 24, 2011
Points are referred to by a lender. Suggest you speak with the lender about said points and fees. If you don't know of any local lenders, start with your bank as you already have a professional relationship established with them.

Sorry I cant be more specific without more detail(s) regarding your questions.

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