Refinance Home Loan Points
Of major importance to many refinance home loan shoppers is how many points are being applied to their mortgage, yet most do not know that there are actually two different types of points that can be applied to a refinance home loan. The first type of points are called origination points and they are percentage points multiplied against the total mortgage amount, also considered as the lender’s markup on the loan. The second type of points are called discount points and they are applied to buy down the borrower’s refinance home loan interest rate. One discount point is equal to one percent of the total mortgage amount, although many discount points can be applied to lower the homeowners refinance rate.