Glossary Term: POINTS
Definition(s) for POINTS:
1. ) refers to an amount paid to a mortgage lender, at the time of closing, above and beyond the regular interest payments. Each point equals 10f the mortgage face amount. When an individual is buying a home, points are tax-deductible in full for the year he/she pays for them, provided that they are not out of line for the individual's area and that they represent prepaid interest, which they usually do. If an indivudual pays points when he/she refinances, however, the individual must amortize the tax deduction over the life of theloan.
2. ) In reference to a loan, points consist of a lump sum payment made by the borrower at the outset of the loan period. Generally, each point equals one percent of the loan amount. See also seller's points.
3. ) Finance charges paid by the borrower at the beginning of a loan in addition to monthly interest; each point equals one percent of the loan amount. See also Finance Charge.
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