A Loan Discount is a type of fee that some lenders charge at the origination of a loan to lower the interest rate charged during subsequent payments. It’s commonly known as discount points.
Loan points, also known as discount points, are fees paid directly to the lender at closing in exchange for a reduced interest rate. This is also referred to as 'buying down the rate.'
A Rate Improvement Mortgage is a type of mortgage loan that includes a provision allowing the borrower to reduce the interest rate when market rates decline. This option can generally be exercised only once during the life of the loan.
A subsidy buy-down is a type of mortgage arrangement where the interest rate is reduced either immediately or over the initial few years of the loan, with the reduction subsidized by a third party. This subsidy can come from various sources such as the seller, from government or non-profit programs, with the aim of making homeownership more affordable.
