"Points" on a new lot loan

We're buying a lot and the banks we've spoken with all charge one point for the lot loan. When we built the house we're living in now, we didn't pay any points. What's typical down in sowal?

I'd add a smiley but can't figure out how all you guys do that. I've got emoticon envy.

Don't know about points but for the emoticons are to the right and you just click on one. Like so

Don't know about points but for the emoticons are to the right and you just click on one. Like so

I guess I meant all those fancy emoticons. The barfing ones in particular looked good (although maybe not apropos for this message). Also, when I add icons, they end up at the top, like so.

I guess I meant all those fancy emoticons. The barfing ones in particular looked good (although maybe not apropos for this message). Also, when I add icons, they end up at the top, like so.

:scratch: Hmmmm.... I think I see the problem. You are adding the icons under the posting box. Those only show up at the top of your post. You need to click on the emoticons to the right of the posting box. Like so

:scratch: Hmmmm.... I think I see the problem. You are adding the icons under the posting box. Those only show up at the top of your post. You need to click on the emoticons to the right of the posting box. Like so

Or like so... :funn:

Please notice the name of this smilie...could Kurt have named this one after the K/J-funns?

Points are just a bank's way of confusing you, like other businesses sometimes attempt. One example which comes to mind are mattresses. To prevent you from shopping from store to store, or online, for the best price for a mattress, each store has a different name or number for the exact same product found in a competitor's store. In Store A, the Seally Dreamsicle may be Store B's Seally Pleasuremate.

The banks do a similar thing. In order to attract you to "better" rates, they will advertise a lower rate, let's say 5% when the norm is 6%, but they may charge you 1 point. Most consumers are left in the dark with a random guess as to which bank has the best deal.

A loan of 5% with 1 point, is essentially an effective rate of 5.125. One point is equivalent to 1/8 (or .125) of a percent on your loan. The point is equivalent to one percent paid to the bank at the beginning of the loan. So basically, on a $100,000 loan, using the above numbers, of a 5% rate with 1 point, you are actually borrowing $99,000 ($100,000 loan - 1 point (or 1%, which equals $1,000 in this case)).

Hopefully, this will not be too overwhelming to comprehend. Focus on the bold typeface to calculate what the bank is really quoting you. Banks may also add other misc fees or admin fees, etc, so be sure to ask about all possible charges. Also find out about all potential penalties, such as penalty for early repayment or semi-monthly payments.

We're buying a lot and the banks we've spoken with all charge one point for the lot loan. When we built the house we're living in now, we didn't pay any points. What's typical down in sowal?

I'd add a smiley but can't figure out how all you guys do that. I've got emoticon envy.

there is no typical loan. the one point is most likely an origination fee. use a broker and don't pay points.

Have the local banks gotten more conservative with lot loans? A couple of years ago they were really pushing hard. Very good for investors.

Have the local banks gotten more conservative with lot loans? A couple of years ago they were really pushing hard. Very good for investors.

Currently, the banks are not so quick to give interest only lot loans. I work closely with a few banks, and they are much tighter now, which is a good thing IMO.

A loan of 5% with 1 point, is essentially an effective rate of 5.125. One point is equivalent to 1/8 (or .125)

Like all GA grads you have the answer for everything .

Currently, the banks are not so quick to give interest only lot loans. I work closely with a few banks, and they are much tighter now, which is a good thing IMO.

Yesterday the Fed waived another red flag at the lenders of residental AND commerial money. If they heed the Fed's warning (and they will) the speculative buying will cease and prices will level and some (especially condos) will drop.

http://www.washingtonpost.com/wp-dyn/content/article/2005/10/12/AR2005101200949.html

Like all GA grads you have the answer for everything .

be careful as that yield difference changes w/ the term o" loan.