Hello all… new here

Would like to know exactly what are points?

And are they a good or bad thing.

I have a small understanding of them, but I would like some clarification on the subject.


Howdy NXproject:

Points are fees charged by lenders to help boost their interest return or a commission for a loan broker. It is called a commission when a Realtor get 6 or 7 points or percentage points off the top of the sales price. They are good if you are collecting and bad if you are paying. Except they are good to pay if you get what you want or need. I pay 4 to 5 points for hard money loans but I can get the money no other way and can turn a run down building around for a nice profit using other peoples money


Hi Carlos, You asked about points… You can shop around to find the best deal and the lowest points possible… Thank you, Michael

points are where you make money as a loan officer. You also make it on the back end but sometimes by tossing one or two in the front you can make a little more money. But becareful because you have to be able to read your customer very well. Some won’t pay it and you can loose the deal by them never answering there phone again. So becareful when charging points.

so are they added to the closing cost, making it out of pocket or do they subtact it from the loan?

Howdy NXproject:

They are added to the closing costs. The next answer depends on the loan amount and the sales price and other closing costs. I closed on a deal where the loan amount was more than all the points, other closing costs and purchase price and I got a refund at closing. Some hard money loans I have done where there is plenty of equity I have gotten the lender to add to the loan amount to include the points.

Hope this helps and LOL

yes that answers my question.

thanks for replying so quickly