Business and Personal Finance Dictionary

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• NEGATIVE POINTS
  
  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?
  
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