Back to Help CenterQ: What are Points?
- Points are fees charged for one of two purposes.
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- The first is to buy down to a lower interest rate than the rate currently being offered by the lender. This results in lower monthly payments over time, but higher closing costs up front.
- The second reason is to cover adjustments that are specific to your individual loan criteria based on higher risk factors such as a lower credit score, cash-out, higher loan-to-value, investment properties and other factors.
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- The amount of these fees is usually set by the secondary market and is standard among lenders.
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