Showing this upfront with no hidden mortgage fees in the fine print is part of Achroma’s fair lending policy and bias-free commitment.
All of the mortgage fees or (credits) you see on Achroma’s site are fully inclusive of the mortgage points associated with the interest rate shown and the fixed dollar fee from the lender. There are no hidden mortgage fees on Achroma’s site. This amount is always a fixed dollar amount and doesn’t vary with your loan amount, like the mortgage points. These will show up with various labels like “Underwriting Fee”, “Administrative Fee”, “Processing Fee”, etc. You’ll also want to check the fine print for any additional lender fees or hidden mortgage fees. The best shopping experience is to show you the mortgage points in dollars instead of a percentage since that’s the bottom line.
You can get a credit if you choose a higher interest rate where you are no longer paying for a discount. Any lender credits at closing can be used to offset the remaining costs on your loan. For example, on a $300,000 loan with -0.47 mortgage points you’ll multiply the loan amount by -0.47% and get a $1,410 credit. It is also possible to have negative mortgage points associated with an interest rate. For example, 0.75 points or three quarters (¾) of a point equals 0.75% of your loan amount in fees (that’s $2,250 on a $300,000 loan amount). This can also work for fractions of a point and decimal form. For example, if you’re borrowing $300,000 and the interest rate you chose has 1 point in fees then your lender fees will equal $3,000 (.01 x $300,000). The basic math is that 1 point = 1% (.01) of your loan amount. The more mortgage points you pay, the lower your interest rate will be. They are also known as discount points because you are essentially discounting or lowering your interest rate by paying mortgage points. Mortgage points are fees your lender charges based on the interest rate you select. Let’s start with a mortgage points definition and then we can talk about how mortgage points work.
It’s important that you understand how mortgage points work because they are a component of the total cost of a mortgage. The varying differences and confusing terminology is enough to make your head spin. Sometimes you’ll even see a lender say this interest rate comes with 1 point in fees. It’ll be a number that’s either in decimal or percentage format. If you’ve started to shop around for a mortgage then you’ve probably noticed that each interest rate comes with “mortgage points”.
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