What Are points And Fees?

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The words fees and points are thrown around a lot, but what exactly does it mean? You know that the fewer points and fees, the better but what exactly are they? Fees are what it cost to complete the loan. Money that needs to be paid to the appraiser, the title company, the escrow company, recording fees with the county, application fees, processing fees, and all other companies involved. When you have to pay a fee, you are paying for these services. In a loan where you do not have to pay fees, the lender is the one that covers the cost. Points are a percentage that the loan officer charges. 1 point is equivalent to 1% of the loan amount. “no points no fee” loans mean exactly that, there will be no points charged to the borrower and the fees will be all covered by the lender. If you are willing to pay some fees and maybe some points, you will be able to get lower interest rates on the loan. “No point no fee” loans will always have a higher rate than a loan where the

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