WHAT'S DISCOUNT POINTS

[Anonymous]

L) SELLERS CLOSING COSTS AND BROKERAGE COMMISSION

If necessary to complete a transaction, Seller will contribute up to:

(i) $6000 towards Buyer’s non-recurring closing costs, discount points, and, if applicable, Buyer’s Non-allowable FHA/VA costs; (ii) $0 as a credit to Buyer at closing for Buyer to purchase a Home Protection Plan; and (iii) $ towards a termite report.

I'm due to close on my house on this coming Monday and I have some question can anyone tell me what does my above statement mean when it says"

discount points, and where it says Buyer Non-allowable FHA/VA costs;

[Lel]

I don't know the answer to the non-allowable costs, but discount points are a percentage of the loan amount that is paid to get a lower interest rate.  It's an upfront fee that adds to the closing costs, but over time it saves the borrower money in the form of lower interest payments.

[Uborrow-Upay]

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@Lel wrote:
I don't know the answer to the non-allowable costs, but discount points are a percentage of the loan amount that is paid to get a lower interest rate.  It's an upfront fee that adds to the closing costs, but over time it saves the borrower money in the form of lower interest payments.

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+1

Non-allowable costs used to be an entire list of items, but since 2006 most of those items are now allowed.  The only item not allowed now is for tax service, and you're probably looking at under $100 for that.