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Loan and Mortgage Terms Glossary |
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Discount Points:
Amounts paid to the lender based on the loan amount to buy the interest rate down. In the mortgage industry, this term is usually used in only in reference to government loans, meaning FHA and VA loans. Discount points refer to any "points" paid in addition to the one percent loan origination fee. Each point is one percent of the loan amount; for example, two points on a $100,000 mortgage is $2,000.
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