Expert: Bobbi Buehl - 12/9/2007

Question
can you please explain in laymans terms what the points are all about when you get a loan. Specifically a home loan.
For example if your loan is 6% and they add 2 pts that would make it 8%, right? So do you have to pay 8% for the life of the loan (provided its a fixed loan)
I don't understand what its all about.

Answer
Joyce,

Fist of all, if you pay 6 or 8 points for any loan you are in what's called predatory lending. The law is no more than 5 points and that is too much also!

You should pay no more than 3 points for a loan and that number is based off a small loan amount. The typical points charged to secure a loan is 1-2 points if using an honest Lender!

Unless you are paying the point(s) up front, then yes you are paying the point(s) for the life of the loan.

Hope that answers your question.... : )

Have a great day!

Bobbi
AmeriFirst Mortgage
Buehlb@aol.com