Mortgage Loan FAQ | Denver Mortgage | Colorado Mortgage

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Does zero points really mean zero points?

The answer is maybe. Points can be expressed on a Good Faith Estimate under several headings.

  • Orignation Fees or Points
  • Discount Fees or Points
  • Mortgage Broker Fee

Generally speaking, if you are paying points they should be listed on either line 801 or 802 of the standard Good Faith Estimate.

Underwriting fees, appraisal fees, and fees outside of section 800 are not considered "points". However, some of those fees (and ALL points) are included in what is called your "APR". APR stands for Annual Percentage Rate. This is NOT your interest rate that you pay on your loan. APR refers to the yield that the lender expects to make over the life of your loan. Some fees are included in the APR while others are not. The fees that are included in your APR are dictated by Government Regulation, not by any lender or loan officer.

Unscrupulous loan officers may try to hide points under various names, however these fees by nature must be in section 800 somewhere. If you are unsure if you are paying points, check section 800 carefully and if you don't understand a fee, just ask.

Points can have a direct impact on your interest rate. Choosing to pay points may offer you a lower interest rate. Choosing a zero point loan, may yield a higher interest rate on your loan.

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