topic Re: Rate/point rounding in Mortgage Loans
https://ficoforums.myfico.com/t5/Mortgage-Loans/Rate-point-rounding/m-p/5757019#M232838
<P>Discount points, or their percentage reflect the cost to obtain whichever rate you are being offered.</P><P> </P><P>Using your example let's assume a hypothetical $100,000 loan amount. .761 points = $761 to obtain the rate of 2.75%. Conversely, you might see the rate of 3.00% at par value meaning no points being charged or even a lender credit issued of .761 points to accept a higher rate of 3.25% where you the consumer can take that $761 and reduce your closing costs. </P><P> </P><P> </P>Fri, 27 Sep 2019 23:51:35 GMTNC_Mtg_Loaner2019-09-27T23:51:35ZRate/point rounding
https://ficoforums.myfico.com/t5/Mortgage-Loans/Rate-point-rounding/m-p/5756048#M232809
<P>Question. If a rate is 2.75 with .761 points and a buyer buys 1 full point, will they reduce the rate a little to account for the .239 difference? So, the 2.75 rate could end up like 2.69? Or will they only allow the partial .761 point?</P>Fri, 27 Sep 2019 02:16:10 GMThttps://ficoforums.myfico.com/t5/Mortgage-Loans/Rate-point-rounding/m-p/5756048#M232809homebuyer3602019-09-27T02:16:10ZRe: Rate/point rounding
https://ficoforums.myfico.com/t5/Mortgage-Loans/Rate-point-rounding/m-p/5757019#M232838
<P>Discount points, or their percentage reflect the cost to obtain whichever rate you are being offered.</P><P> </P><P>Using your example let's assume a hypothetical $100,000 loan amount. .761 points = $761 to obtain the rate of 2.75%. Conversely, you might see the rate of 3.00% at par value meaning no points being charged or even a lender credit issued of .761 points to accept a higher rate of 3.25% where you the consumer can take that $761 and reduce your closing costs. </P><P> </P><P> </P>Fri, 27 Sep 2019 23:51:35 GMThttps://ficoforums.myfico.com/t5/Mortgage-Loans/Rate-point-rounding/m-p/5757019#M232838NC_Mtg_Loaner2019-09-27T23:51:35ZRe: Rate/point rounding
https://ficoforums.myfico.com/t5/Mortgage-Loans/Rate-point-rounding/m-p/5757110#M232842
Thanks for that. But I need to know about the rounding. I'm being given 1 point for free and I wanted to know how that will affect the rate in the given scenario.<BR /><BR />So, if a 100k loan and .761 used to reduce rate, can I use the other .239 or $239 as a credit towards closing?Sat, 28 Sep 2019 02:03:02 GMThttps://ficoforums.myfico.com/t5/Mortgage-Loans/Rate-point-rounding/m-p/5757110#M232842homebuyer3602019-09-28T02:03:02ZRe: Rate/point rounding
https://ficoforums.myfico.com/t5/Mortgage-Loans/Rate-point-rounding/m-p/5757252#M232844
To clarify is someone (Seller, Lender, ?) giving you an amount equal to 1% of your loan amount to Apply toward discount points and/or closing costs? Example $100,000 loan and you have been given $1000/or 1% of your loan amount to buy your interest rate down? I’m pretty sure this is what you are saying, except in your case it’s only costing $750 (Example) to reduce your rate and you want to know what happens to the other $250? If this is your question (and this scenario happens in a huge percentage of mortgage loans) the excess funds are Generally credited towards other loan fees or expenses. And will show up as a credit at closing of escrow. Which means you will need $250 less of your own money to close.<BR />This would be an excellent time to confirm that the credit is being fully used to Lock in the Interest Rate and any balance of funds will be a credited to offset your closing costs.<BR />I hope this makes sense, it’s late!Sat, 28 Sep 2019 05:42:56 GMThttps://ficoforums.myfico.com/t5/Mortgage-Loans/Rate-point-rounding/m-p/5757252#M232844JVille2019-09-28T05:42:56ZRe: Rate/point rounding
https://ficoforums.myfico.com/t5/Mortgage-Loans/Rate-point-rounding/m-p/5757269#M232847
Yes, that makes sense. I just needed to know that the difference was accounted for somewhere in the final numbers. Thanks.Sat, 28 Sep 2019 06:43:04 GMThttps://ficoforums.myfico.com/t5/Mortgage-Loans/Rate-point-rounding/m-p/5757269#M232847homebuyer3602019-09-28T06:43:04ZRe: Rate/point rounding
https://ficoforums.myfico.com/t5/Mortgage-Loans/Rate-point-rounding/m-p/5757495#M232848
Please CLARIFY with your lender that the balance of your Seller Concession/ Credit will be applied to other buyers closing costs and show as a credit to you at COE.<BR />Unless your contract says UpTo 1%Sat, 28 Sep 2019 17:06:12 GMThttps://ficoforums.myfico.com/t5/Mortgage-Loans/Rate-point-rounding/m-p/5757495#M232848JVille2019-09-28T17:06:12Z