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What Are Points?

Points are generally defined as fees paid to a lender solely for the use or forbearance of money and not for specific services that the lender performs in connection with the borrower's loan and are treated as pre-paid interest. Thus, points are not charged in every real property transaction. When points are charged, they are not always designated in the escrow documents as points and frequently are referred to as any of the following:

  • Loan origination fees 
  • Loan processing fees
  • Maximum loan charges
  • Premium charges, etc.

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