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welcome back in this section were going to talk about discount points and origination points a discount point sometimes its referred to as a buy down some time a lender will approve a borrow at a certain rate but they offer discount points money pay up front to get a lower rate for example I have a 6% rate how much can I pay up front to buy it down to five point five percent how many discount points can I pay to get a lower rate no buy downs and discount points the word is used interchangeably can be temporary and they can also be permanent depends on how its set up temporary is just that if the amount is bought down or discounted for a temporary period of time its expressed by the contract but if its a permanent buy dog its for the entire life of the loan regardless of how you calculate points points are based on the loan amount so again discount points are if money paid upfront to buy down the right to get a lower rate points are based on the loan amount in the problem sometimes
