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rondapullen · Joined: 06 Oct 2009 Posts: 1 1.00 Dollars($)

Can bank lenders raise discount points to cover closing costs? I was working with one who offered 5.25 with 1 discount point, and closing costs of $4,100, well over the 3% limit on closing costs for A6 loans. He realized his mistake after I questioned him, and he raised the points to 2-1/2 but still offered the 5.25 instead of lowering the interest rate.

adonis · Posted: Tue Oct 06, 2009 9:44 pm Post subject:

Hi rondapullen,

As far as I know, you would be able to lower your interest rate by paying the discount points. You should note that discount points represent additional money that you pay to the lender at closing which helps you in reducing your interest rate.

Guest

But ... the limit of 3% of total loan value on Texas A6 loans for closing costs bit him, and he had to recover his costs somewhere, so he raised the points from 1 to 2-1/2. lol I just wondered if it was legal for him to do that under A6 rules.

Posted: Wed Oct 07, 2009 10:43 pm Post subject:

Better contact an attorney who has expertise in Texas A6 rules and get to know whether or not it's legal for the lender to charge you higher rates.

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