Negative points

Definition

Points paid by a lender for a loan with a rate above the rate on a zero point loan.

For example, a wholesaler quotes the following prices to a mortgage broker.

8%/0 points,

7 >> 5%/3 points,

8 >> 75%/-3 points.

On mortgage web sites, negative points are usually referred to as "rebates" because they are used to reduce a borrower's settlement costs.

When negative points are retained by a mortgage broker, they are called a "yield spread premium".

Read Can Mortgage Points Be Negative?

and Ignore Lender Payments to My Broker?

On policy issues connected to negative points, see HUD and Yield Spread Premiums, and A Better Approach to YSPs?

Related Terms

Other terms related to 'Negative points' starting with the letter 'N'

Non Permanent resident alien, Net branch, Nichification, Negative amortization, Nominal interest rate

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