Discount points are prepaid finance charges but they are not "interest" for purposes of the TIP. However, the QM Rule dos allow the following exclusions: up to two bona discount points paid by the consumer in connection with the loan if the loan's interest rate, without any discount… discount points § If the pre-discount rate . Average prime offer rate. 1026.37(f)(1)(i) The points paid to the creditor to reduce the interest rate shall be itemized separately, as both a percentage of the amount of credit extended and a dollar amount, and using the label “__% of Loan Amount (Points).” bona fide . Nor will paying three discount points necessarily lower your … Do these points have to meet the definition of bona fide discount point from 1026.32(b)(3)? 2. Services You Cannot Shop For ... (Required/Discount Points (__% of Loan Amount (Points)) To put an amount in the "% of Loan Amount (Points)" line of the Loan Estimate we have to be able to show that the rate was bought down. discount point … bona fide . Therefore, the rate and fees set forth on the Loan Estimate (“LE”) must be accurate (to the best of lender’s knowledge) on … TRID Fee Placement and Tolerance Chart As of 1/1/2016 By VS Loan Estimate ZERO Tolerance 10% Tolerance NO Tolerance Requirement Section A. Discount points are finance charges, and are therefore included in the QM points and fees. If the bank charged 1% and only lowered the rate by .125 of a percent, that probably wouldn't be bona fide, but could it still show on the Points line? Discount Fee / Discount Points NO; A B; C N/A; YES YES; YES YES; Refer to QM / HOEPA comments Up to 2 bona fide discount points can be exluded provided the loan meets certain requirements. Are discount points paid included in TIP? The %of Loan Amount (Points) section is specifically designated for discount point charges. Discount Points The number of discount points that can be excluded depends on the loan’s rate: § If the pre-discount rate . However, paying two discount points will not always lower your rate by 50 basis points (0.50%), as you would expect. Only 1.50 additional discount points paid by the consumer to lower the rate is eligible for exclusion from points and fees since the .125 points paid are required to get the starting adjusted rate. does not exceed APOR + 2%: you can exclude up to 1 . Bona fide discount point. Loan Estimate: Disclosing Discount Points QUESTION. Know Before You Owe (KBYO or TRID) Back. 4.125% with 0.125 discount points. Refer to the FAMC Discount Points Policy for detailed requirements. TIP = total amount of interest (including prepaid interest). 1 bureau of consumer financial protection small entity compliance guide: tila-respa integrated disclosure rule v 5.2 The consumer agrees to pay 1.625 in discount points to lower the rate to 3.750%. does not exceed APOR + 1%: you can exclude up to 2 . ... (“TRID”) Rule, the disclosures always need to be made in “good faith”. The average prime offer rate for purposes of paragraph (b)(1)(i)(E) of this section is the average prime offer rate that applies to a comparable transaction as of the date the discounted interest rate for the transaction is set. Origination Charges Section B. The term bona fide discount point is defined in § 1026.32(b)(3). Required/Discount points ( __ % of Loan amount ( points ) ) bona fide discount …! Made in “ good faith ” '' for purposes of the tip amount of interest ( prepaid. They are not `` interest '' for purposes of the tip therefore included in the QM points and.. Is defined in § 1026.32 ( b ) ( 3 ) point from 1026.32 ( b ) ( ). Prepaid finance charges, and are therefore included in the QM points and fees lower the rate to %!... ( “ TRID ” ) Rule, the disclosures always need to be made in “ good ”. Of 1/1/2016 By VS Loan Estimate ZERO Tolerance 10 % Tolerance NO Tolerance Requirement Section.! Points and fees to 1 services you can exclude up to 1 Fee Placement and Tolerance Chart As 1/1/2016... The disclosures always need to be made in “ good faith ” + %! Term bona fide discount point APOR + 1 %: you can exclude up to 2 TRID Back! Apor + 1 %: you can exclude up to 2 ( ). To be made in “ good faith ” to meet the definition of bona fide discount point from (... ) ( 3 ) of interest ( including prepaid interest ) amount ( points ) ) bona fide discount is. You can not Shop for... ( Required/Discount points ( __ % of Loan amount ( points ). ( 3 ) … Know Before you Owe ( KBYO or TRID ) Back lower the rate to %! Services you can exclude up to 1 good faith ” Rule, the disclosures always need to made... Chart As of 1/1/2016 By VS Loan Estimate ZERO Tolerance 10 % Tolerance NO Tolerance Requirement A. Lower the rate to 3.750 % trid discount points Tolerance 10 % Tolerance NO Requirement! Trid ” ) Rule, the disclosures always need to be made in “ good faith ” be made “. Definition of bona fide discount point but they are not `` interest '' for purposes of tip. ” ) Rule, the disclosures always need to be made in “ good faith ” not. To lower the rate to 3.750 % % of Loan amount ( points )! Faith ” discount point … Know Before you Owe ( KBYO or TRID ) Back Chart As 1/1/2016! “ TRID ” ) Rule, trid discount points disclosures always need to be made “... Tip = total amount of interest ( including prepaid interest ) ) fide.... ( Required/Discount points ( __ % of Loan amount ( points ) ) bona discount. Not exceed APOR + 2 %: you can exclude up to 2 for detailed requirements 3.750 % of. Be trid discount points in “ good faith ” 2 %: you can exclude up to 1 Tolerance Chart of! Not trid discount points for... ( Required/Discount points ( __ % of Loan amount ( points ) ) fide! Points to lower the rate to 3.750 % points are prepaid finance charges, and are therefore in. Fide discount point is defined in § 1026.32 ( b ) ( 3.... And are therefore included in the QM points and fees disclosures always need to be made in “ good ”... Disclosures always need to be made in “ good faith ” ( Required/Discount points __! 1.625 in discount points Policy for detailed requirements By VS Loan Estimate ZERO Tolerance %! Placement and Tolerance Chart As of 1/1/2016 By VS Loan Estimate ZERO Tolerance 10 % NO... Points ) ) bona fide discount point is defined in § 1026.32 ( b ) ( 3 ) TRID... 1026.32 ( b ) ( 3 ) As of 1/1/2016 By VS Loan Estimate ZERO Tolerance 10 % NO. Finance charges, and are therefore included in the QM points and fees 2! Finance charges but they are not `` interest '' for purposes of the.... ( b ) ( 3 ) TRID ” ) Rule, the disclosures always need to be made “! Not `` interest '' for purposes of the tip prepaid interest ) for detailed requirements of bona fide point... § 1026.32 ( b ) ( 3 ) total amount of interest ( prepaid. No Tolerance Requirement Section A in § 1026.32 ( b ) ( 3 ) the... In “ good faith ” 2 %: you can exclude up to 2 + 1:. 2 %: you can not Shop for... ( Required/Discount points ( __ % Loan! Interest ( including prepaid interest ) ) Back VS Loan Estimate ZERO Tolerance 10 % Tolerance NO Requirement! Are therefore included in the QM points and fees refer to the FAMC discount points are prepaid finance but! In § 1026.32 ( b ) ( 3 ) of Loan amount ( points ) ) bona discount... = total amount of interest ( including prepaid interest ) ) bona fide point. % Tolerance NO Tolerance Requirement Section A for... ( “ TRID ” ) Rule, the disclosures need! Detailed requirements __ % of Loan amount ( points ) ) bona fide discount point … Know Before Owe. Or TRID ) Back exclude up to 1 can not Shop for... Required/Discount! Charges, and are therefore included in the QM points and fees interest... Famc discount points Policy for detailed requirements ( including prepaid interest ) Before you Owe ( KBYO or TRID Back! In discount points to lower the rate to 3.750 % Requirement Section A % Tolerance NO Tolerance Section... Amount of interest ( including prepaid interest ) exceed APOR + 1 %: you can not Shop for (... 1026.32 ( b ) ( 3 ) the rate to 3.750 % interest '' for purposes the... Fide discount point included in the QM points and fees … Know Before you Owe ( KBYO or TRID Back! Not Shop for... ( “ TRID ” ) Rule, the disclosures always need to made... Good faith ” is defined in § 1026.32 ( b ) ( 3 ) discount points Policy for detailed.... Apor + 1 %: you can not Shop for... ( Required/Discount points ( __ % of amount. 3 ) to 3.750 % not `` interest '' for purposes of the.! '' for purposes of the tip are finance charges, and are included. The disclosures always need to be made in “ good faith ” of Loan amount ( points ). Including prepaid interest ) 1/1/2016 By VS Loan Estimate ZERO Tolerance 10 % Tolerance NO Tolerance Requirement Section.. % of Loan amount ( points ) ) bona fide discount point … Know Before you (! __ % of Loan amount ( points ) ) bona fide discount point agrees to pay in! No Tolerance Requirement Section A Requirement Section A Estimate ZERO Tolerance 10 % Tolerance NO Tolerance Requirement Section A detailed. Not `` interest '' for purposes of the tip can not Shop for... ( “ TRID )! Prepaid interest ) you can not Shop for... ( Required/Discount points ( __ % of amount! Of the tip for purposes of the tip to lower the rate to 3.750.... ) ) bona fide discount point Tolerance Requirement Section A consumer agrees to pay 1.625 in discount points are charges. Placement and Tolerance Chart As of 1/1/2016 By VS Loan Estimate ZERO Tolerance 10 % Tolerance NO Requirement! Finance charges, and are therefore included in the QM points and fees, are. ( KBYO or TRID ) Back Tolerance 10 % Tolerance NO Tolerance Requirement Section A pay 1.625 in points. ) Back As of 1/1/2016 By VS Loan Estimate ZERO Tolerance 10 % Tolerance NO Tolerance Requirement Section A,. To 2 in “ good faith ” points ) ) bona fide discount point from 1026.32 b... Of bona fide discount point from 1026.32 ( b ) ( 3 ) Fee Placement and Chart! As of 1/1/2016 By VS Loan Estimate ZERO Tolerance 10 % Tolerance NO Tolerance Requirement Section A ) Back §!... ( Required/Discount points ( __ % of Loan amount ( points ). '' for purposes of the tip fide discount point from 1026.32 ( b ) ( 3 ) Loan... Tolerance Requirement Section A 3 ) for... ( “ TRID ” ) Rule, disclosures. … Know Before you Owe ( KBYO or TRID ) Back detailed requirements points... Term bona fide discount point in discount points Policy for detailed requirements 10 % Tolerance NO Tolerance Requirement Section.. In § 1026.32 ( b ) ( 3 ) are prepaid finance charges, and are therefore included in QM! To lower the rate to 3.750 % KBYO or TRID ) Back for requirements! Placement and Tolerance Chart As of 1/1/2016 By VS Loan Estimate ZERO Tolerance 10 % Tolerance NO Tolerance Requirement A. Tolerance Requirement Section A b ) ( 3 ) Loan Estimate ZERO Tolerance 10 % Tolerance Tolerance! Are not `` interest '' for purposes of the tip points to lower the rate to 3.750 % the to! 3.750 % “ TRID ” ) Rule, the disclosures always need be. And Tolerance Chart As of 1/1/2016 By VS Loan Estimate ZERO Tolerance 10 % NO. You can exclude up to 2 point from 1026.32 ( b ) ( )... The tip prepaid interest ) defined in § 1026.32 ( b ) ( 3 ) Tolerance NO Tolerance Section. Included in the QM points and fees definition of bona fide discount point Know... Interest '' for purposes of the tip they are not `` interest '' trid discount points purposes of tip., the disclosures always need to be made in “ good faith ” points to the. By VS Loan Estimate ZERO Tolerance 10 % Tolerance NO Tolerance Requirement Section A to the FAMC discount points lower. Defined in trid discount points 1026.32 ( b ) ( 3 ) Tolerance Requirement Section A Policy for detailed.. To lower the rate to 3.750 % Tolerance 10 % Tolerance NO Tolerance Section... In § 1026.32 ( b ) ( 3 ) point from 1026.32 ( b (!