Negative Points

Filed Under » , ,
Dictionary Says

Definition of 'Negative Points'

A cash rebate paid by lenders to a mortgage broker or the borrower for a mortgage with an interest rate above the lender's par interest rate. When the rebate is paid to the mortgage broker, it is known as a yield spread premium, and is part of the mortgage broker's compensation. 

When the rebate is credited to the borrower it can be used to defray loan settlement costs. This is typically known as a no-cost mortgage. The amount credited to the borrower may not exceed loan settlement costs, and may not be used as part of the down payment.
Investopedia Says

Investopedia explains 'Negative Points'

Negative points provide a way for borrowers with little or no money to pay the settlement costs and obtain a mortgage. However, the true economics of using negative points will depend on the borrower's time horizon. 

If the borrower intends to hold the mortgage for a short period of time, it can be economical to avoid upfront costs in exchange for a relatively higher interest rate. If the borrower intends to hold the mortgage for a long period of time, it is most likely more economical to pay upfront settlement costs in exchange for a relatively lower interest rate.
Search results for

'Negative Points'

  • Option Price-Volatility Relationship: Avoiding Negative Surprises

    http://www.investopedia.com/articles/optioninvestor/05/020205.asp
    ... which shows a rise in implied volatility by three percentage points, we see ... The fall
    in implied volatility at market rebounds can cause negative surprises by ...

  • DMI Points The Way To Profits

    http://www.investopedia.com/articles/technical/02/050602.asp
    DMI Points The Way To Profits. ... The positive directional movement indicator (+DMI)
    measures how strongly price moves upward; the negative directional movement ...

  • Get Positive Results With Negative Basis Trades

    http://www.investopedia.com/articles/trading/08/negative-basis-trades.asp
    ... normal" and liquidity returns to the cash market, the negative basis trade ... Setting
    appropriate exit points should help you avoid taking premature profits or ...

  • Making A Living On Death Bonds

    http://www.investopedia.com/articles/bonds/08/death-bonds-portfolio.asp
    ... Investors interested in death bonds need to weigh the negative points as well as
    the upside of such an investment vehicle, and should also take into account ...

  • Get Positive Earnings In The Negative-Sum Market

    http://www.investopedia.com/articles/trading/10/winning-negative-sum-game.asp
    ... In order to make an overall profit in a negative-sum game we must be more ... Setting
    appropriate exit points should help you avoid taking premature profits or ... ...

  • Discovering The Force Index

    http://www.investopedia.com/articles/trading/03/031203.asp
    ... A higher market will result in a positive force index, plotted above the center
    line; a lower market points to a negative force index, below the center line. ...

  • Tales From The Trenches: Perfectly Negative Profitability

    http://www.investopedia.com/articles/trading/08/correlation.asp
    ... As long as the negative relationship persisted, there was double confirmation ... Setting
    appropriate exit points should help you avoid taking premature profits or ...

  • Getting To Know The "Greeks"

    http://www.investopedia.com/articles/optioninvestor/02/120602.asp
    ... Therefore, with a negative delta of -51.34, the position will lose 0.51 (rounded)
    points in premium with the next one-point rise in the underlying. ...

  • Options Greeks: Options and Risk Parameters | Investopedia

    http://www.investopedia.com/university/option-greeks/greeks1.asp
    ... call will increase by 0.5 points and the put will decrease by 0.5 points. ... this simple
    concept will be expanded to include positive and negative position Delta ...

  • Options Greeks: Gamma Risk and Reward | Investopedia

    http://www.investopedia.com/university/option-greeks/greeks5.asp
    ... which is 23.4, if a trader buys the put, he or she will see the negative Delta on ...
    a look at the Delta value for the at-the-money 110 strikes (five points higher ...

Related Articles

Bank Rates
Product Today Last Wk
$10K MMA 0.50% 0.51%
MMA 0.45% 0.46%
6 Month CD 0.46% 0.47%
1 Year CD 0.70% 0.75%
5 Year CD 1.46% 1.46%
1 Year Jumbo CD 0.66% 0.67%
Rate data provided by Bankrate
Product Today Last Wk
$30K HELOC 4.59% 4.60%
$30K Home Equity Loan 5.74% 5.77%
$50K Home Equity Loan 5.45% 5.50%
$50K HELOC 4.24% 4.24%
$100K Home Equity Loan 5.41% 5.46%
$100K HELOC 4.13% 4.13%
Rate data provided by Bankrate
Product Today Last Wk
30 Year Fixed 3.80% 3.80%
15 Year Fixed 3.09% 3.11%
1 Year ARM 3.54% 3.53%
30 Year Fixed Jumbo 4.38% 4.38%
5/1 ARM 2.65% 2.69%
3/1 ARM 2.69% 2.69%
Rate data provided by Bankrate
Product Today Last Wk
60 Month Used Car Loan 4.51% 4.51%
48 Month Used Car Loan 4.35% 4.35%
48 Month New Car Loan 3.24% 3.24%
36 Month Used Car Loan 4.34% 4.36%
36 Month New Car Loan 3.11% 3.13%
60 Month New Car Loan 3.35% 3.34%
Rate data provided by Bankrate
Partner Links