Mortgage points Meaning and Definition
Mortgage Points
Pronunciation
/ˈmɔr.gs.toʊ ˈpɔɪnts/
Part of Speech
Noun
Definition
A payment made to a lender at the time of taking out a mortgage, typically used to lower the interest rate, with each point equal to 1% of the loan amount.
Etymology
The term “mortgage points” originates from the practice of paying a percentage of the loan amount to secure a better interest rate, dating back to the early 20th century.
Usage Notes
Mortgage points are usually expressed as a decimal, with 1 point equaling 0.01 of the loan amount. Borrowers can also opt to pay points to reduce the interest rate, often used for longer-term loans.
Cultural References
Shows such as “The Office” and “Parks and Recreation” have featured characters discussing mortgage points and their impact on loan decisions.
Idiomatic Expressions or Phrases
- Paying points to buy down the interest rate
Related Words or Phrases
- Mortgage broker
- Loan amount
- Interest rate
Collocations
- Mortgage points and interest rate
- Mortgage points and loan amount
Frequency of Use
Mortgage points are commonly used in real estate and financial contexts, with a moderate frequency of use in everyday language.
Common Misspellings
- Morgage points
- Mortage points