Points (Mortgage)
Real estateGlossary term
Definition
Upfront fees paid to lenders to reduce the interest rate on a mortgage. One point equals 1% of the loan amount and typically reduces the rate by about 0.25%.
Related terms
- MortgageA loan used to purchase real estate where the property serves as collateral. The borrower makes regular payments over a set term (typically 15-30 years) until the loan is paid off.
- Interest RateThe percentage charged by a lender for borrowing money, or earned on savings and investments. Can be fixed or variable depending on the financial product.
- Closing CostsFees and expenses paid at the closing of a real estate transaction, typically 2-5% of the purchase price. Includes appraisal, title insurance, attorney fees, and loan origination.
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