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There are two kinds of points: discount points and origination points. You need to check on which the lender is charging when you ask about the loan.Discount points are actually prepaid interest on the mortgage loan. The more points you pay, the lower the interest rate on the loan.
Origination points are charged by the lender to cover the costs of making the loan. The origination fee is deductible if it was used to obtain the mortgage and not to pay other closing costs.No-cost mortgages don’t eliminate costs to the borrower, they convert them from costs paid upfront to costs paid over time in the interest rate.
HUD allows a borrower to pre-pay an FHA mortgage in whole or in part and that the mortgage lender can't charge a penalty.