Zero Point Mortgages - Discount Points - Origination fees

Discount Points is prepaid interest used to lower a mortgage interest rate. Normally, the cost for a discount point is recovered after 4-5 years of making the monthly mortgage payments.

An Origination fee is charged by the lender to 'originate' your mortgage loan or help find a home for it. They are normally charged by 1-2% just like the Discount Points.

Many mortgage lenders dont consider an Origination fee as 'points'. If a borrower requests 'no points', this will not include Origination fees. Be sure to request a Good Faith Estimate as soon as you have signed a full home loan application. RESPA requires all lenders to provide the GFE after an application is signed.