What is a point?
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What is a point?
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Jeff Thomas is a Mortgage Advisor and Financial Educator with Family Lender, Inc. located in Fairfax, Virginia. Jeff has seen the mortgage business change significantly in the 15 years he has been in the business. Changes such zero down loans, to relaxed underwriting guidelines to borrowing more than the house is actually worth on a purchase or refinance transaction.
With the changes in the mortgage industry, Jeff has had to make changes in the way he performs his job. Jeff originally thought he was a loan originator, but after realizing the positive impact he could have on other peoples lives he made some basic adjustments to his business and now sees his position and career as a financial educator.
By taking the time upfront to get to know the people he serves, Jeff has been able to positively impact and improve the lives of the people he works with by providing relevant and timely advice. . This assistance comes in many forms, from insurance to painting to helping interview the right retirement professional. This core group of professionals allows Jeff to concentrate on providing the right advice for each person he works with.
Jeff is one of 200 people in the country that is both a Certified Mortgage Planning Specialist – CMPS and a Certified Liability Advisor – CLA. Jeff recently co-authored a book with Todd Ballinger, called “Borrow Smart Retire Rich”. The principles addressed in the book will be covered throughout the video.
Jeff hopes you gain insight on how to purchase and finance a home and hopefully you will find your time well spent and walk away with some information you did not know before. Jeff Thomas, Where Advice Does Make A Difference!
What is a point?
Mortgage Advisor Jeff Thomas discusses what a point is in your mortgage.
Transcripts
Host: What is a point? Jeff Thomas: A point is very simple. It's 8% of the loan amount. So, if you have a $100,000 loan amount and your loan officer says, Okay this program requires one point, well then that's going to be a $1000, a half a point would be $500. It doesn't matter what they call it. Traditionally the loan officers can get paid by an origination fee, a discount point would go to buy your rate down, so you get a better rate and if you are dealing with the mortgage broker they may have a mortgage broker fee.
But the easiest way to alleviate the issues with those is just ask your loan officer, how many point are we charging so when you get the closing, if he says they are charging you two points, well then it will be one plus one. If he says, one and you get the closing and there is an origination fee plus a discount, well then you know something was up because one plus one is not one, it's two.
So if you ask them total number of points, then you'll be able to figure out exactly what's going to happen. So, it doesn't matter what you get charged or what they call them, it just matters what happens at closing.
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