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Meaning / Definition of

Negative Points

Categories: Loan and Mortgage, Credit and Debt, Real Estate,

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.quot;. 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 premium., and A Better Approach to YSPs?

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