Seller-Paid Points

AAA

DEFINITION of 'Seller-Paid Points'

Any points paid by the seller of a home for the buyer. Seller-paid points are always deducted by the purchaser of the home. These points are offered as a purchase incentive for the prospective buyer and can provide the buyer with a lower rate as a result.

INVESTOPEDIA EXPLAINS 'Seller-Paid Points'

Seller-paid points effectively reduce the basis of the home price for the buyer by the dollar amount of the points paid. Homebuyers who purchased their homes between January 1, 1991, and April 4, 1994, should reduce their basis only if they deducted the points as mortgage interest in the year of purchase. Buyers after this date must reduce their basis by points paid regardless of whether they deducted the points or not.

RELATED TERMS
  1. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  2. Origination Points

    A type of fee borrowers pay to lenders or loan officers in order ...
  3. Points

    1. A 1% change in the face value of a bond or a debenture. 2. ...
  4. Mortgage Interest

    The interest charged on a loan used to purchase a residence. ...
  5. Itemized Deduction

    A deduction from a taxpayer's taxable adjusted gross income that ...
  6. Gentrification

    Gentrification refers to when a neighborhood or city undergoes ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Credit & Loans

    Mortgage Points: What's The Point?

    Learn how to pay less for your home in the long run, or save in the short run.
  2. Options & Futures

    Score A Cheap Mortgage

    Hidden costs can create what looks like a good deal. Find out how to find the best mortgage possible.
  3. Credit & Loans

    Understanding The Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
  4. Options & Futures

    Give Yourself More Options With Real Estate Options

    Real estate options have many benefits, including a smaller initial capital requirement.
  5. Home & Auto

    Real Estate Face-Off: Zillow Vs. Trulia

    Both websites help you find homes for sale, but they organize the information differently. Here's how they compare.
  6. Options & Futures

    How To Make Money WIth Real Estate Options

    Buying real estate options is one way to invest in real estate at a lower entry cost.
  7. Personal Finance

    What's a Commercial Bank?

    A commercial bank is a type of financial institution that accepts deposits, offers checking account services, makes business, personal and mortgage loans; and offers basic financial products ...
  8. Home & Auto

    Getting A Mortgage In Your 50s

    The financial considerations are different when you take out a mortgage in your 50s. Here's what you need to review as you calculate the pros and cons.
  9. Home & Auto

    Mortgage Guide For Thirty-Somethings

    Five things to consider before you sign on the dotted line for a mortgage.
  10. Credit & Loans

    Buying A House? Avoid These 7 Mistakes

    Owning your own home gives you a feeling of independence that renting can’t offer, and there are big financial benefits, too.

You May Also Like

Hot Definitions
  1. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  2. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  3. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  4. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  5. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  6. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
Trading Center