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' No Surprise adjustable rate mortgage, No ratio loan, Negative amortization cap, Nichification, Non Permanent resident alien
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