Home Mortgage Quote Problems? The Likely Culprit Is Your Credit. - part 2

by Paul Lerner

Not giving due attention to points being charged can prove costly to a consumer. Different terms may be used for points with some examples like origination fees, broker fees, discount fees and yield spread premium.

Front and Band End Points Despite these terms, there are two basic types of points. The first is the upfront fees that the consumer pays to the lender. It is a form of compensation paid to either the lender or the broker for making the loan transaction possible.

A back end point is the other type of points that the lender pays to the mortgage broker. Sometimes they act as extra incentive for a particular loan. But it is mostly for loans given at a higher rate of interest as a reward to the broker. The problem occurs when these points spur unscrupulous lenders to hike up the rates with the consumer being absolutely unaware of it.

Copyright (c) Paul Lerner

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