{"id":594669,"date":"2022-09-30T23:09:31","date_gmt":"2022-09-30T23:09:31","guid":{"rendered":"https:\/\/drewdodds.vipmtginc.com\/blog\/?p=594669"},"modified":"2025-09-08T19:40:14","modified_gmt":"2025-09-08T19:40:14","slug":"everyone-pays-points","status":"publish","type":"post","link":"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/","title":{"rendered":"Everyone pays points!*"},"content":{"rendered":"<p><img fetchpriority=\"high\" decoding=\"async\" class=\"size-full wp-image-594670 aligncenter\" src=\"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-content\/uploads\/2022\/09\/Picture2.jpg\" alt=\"\" width=\"432\" height=\"323\" \/><\/p>\n<p>Unless you\u2019ve stayed away from any form of communication in the modern world, it&#8217;s no mystery that\u00a0mortgage rates\u00a0have been moving relentlessly higher in 2022. But how high is high?\u00a0 That will depend on a number of factors, including:<\/p>\n<ul>\n<li>Date and time of day of the quote (things change quickly \u2013 some days, we can have multiple re-pricings)<\/li>\n<li>Specifics of the scenario (loan type, loan-to-value, credit score, etc)<\/li>\n<li>Presence of discount fees (&#8220;points&#8221;, or, upfront interest) and other upfront costs in the rate quote<\/li>\n<\/ul>\n<p>For a moment, I\u2019d like to discuss the last bullet point \u2013 paying points \u2013 in the current lending market, and why it seems like so many homeowners are currently paying them.<\/p>\n<p>To truly understand why, you&#8217;d need a basic understanding of how mortgage-backed securities (MBS) translate to mortgage rates.<\/p>\n<p>I\u2019ll break out the crayons and try to explain so a Marine could understand (quite the feat): MBS are bonds comprised of multiple mortgages.\u00a0 They&#8217;re offered in 0.5% increments, which are known as \u201ccoupons\u201d.\u00a0 Each coupon contains a certain range of mortgage rates (with +1.125% being the upper limit).<\/p>\n<p>As an example, an MBS coupon of 6.0 would be required for a mortgage rate of 7.125% (6.0 MBS coupon +1.125%).\u00a0 A 6.5 MBS coupon could not facilitate rates any higher than 7.625% (6.5 + 1.125%).<\/p>\n<p>The problem is that 6.0 MBS coupons only existed in the history books up until last week (so they are based on antiquated data).\u00a0 Even then, it takes a significant amount of time and market stability for new coupons to be properly priced.<\/p>\n<p>Due to the pricing uncertainty, lenders are incentivizing homeowners to pay discount fees (points), for a lower rate. In fact, certain agencies \/ lenders aren\u2019t even currently offering 0-point loans (note: especially true with Gov\u2019t loans \u2013 VA, FHA, USDA, etc).<\/p>\n<p>Regardless, the encouragement to pay points reflects in the pricing: the same 1% discount fee with today\u2019s pricing typically gets the owner a .375 &#8211; .5% reduction in rate. Months back, that same 1% discount fee may have only reduced the rate by .25%. This creates a shorter recapture period (read: time it takes to make the upfront cost of the point back via monthly savings of lower rate) and may be the right way for homeowners to hedge against higher payments.<\/p>\n<p>The net: until the market has a defined price for these coupons (if they hold in rate \/ price), buyers must expect to pay a bit more for \u201creasonable\u201d rates. On the other end, seller concessions will more than likely become more and more predominant (and needed, in certain cases) while these pricing trends persist.<\/p>\n<p>Hope this bit of knowledge helps you understand the current pricing environment a touch better &#8211;<\/p>\n<p>As always, here to help along the way. \ud83d\ude0a<\/p>\n<p>Cheers,<\/p>\n<p>Drew (&amp; Team)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unless you\u2019ve stayed away from any form of communication in the modern world, it&#8217;s no mystery that\u00a0mortgage rates\u00a0have been moving relentlessly higher in 2022. But how high is high?\u00a0 That will depend on a number of factors, including: Date and time of day of the quote (things change quickly \u2013 some days, we can have [&hellip;]<\/p>\n","protected":false},"author":26,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-594669","post","type-post","status-publish","format-standard","hentry","category-drew-dodds"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Everyone pays points!* - Drew Dodds<\/title>\n<meta name=\"description\" content=\"..from any form of communication in the modern world, it&#039;s no mystery that\u00a0mortgage rates\u00a0have been moving relentlessly higher in 2022.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Everyone pays points!* - Drew Dodds\" \/>\n<meta property=\"og:description\" content=\"..from any form of communication in the modern world, it&#039;s no mystery that\u00a0mortgage rates\u00a0have been moving relentlessly higher in 2022.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/\" \/>\n<meta property=\"og:site_name\" content=\"Drew Dodds\" \/>\n<meta property=\"article:published_time\" content=\"2022-09-30T23:09:31+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-09-08T19:40:14+00:00\" \/>\n<meta name=\"author\" content=\"Drew Dodds\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Drew Dodds\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/2022\\\/09\\\/30\\\/everyone-pays-points\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/2022\\\/09\\\/30\\\/everyone-pays-points\\\/\"},\"author\":{\"name\":\"Drew Dodds\",\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/#\\\/schema\\\/person\\\/a9b55d000ca877f53f3b7b733fb26b9b\"},\"headline\":\"Everyone pays points!*\",\"datePublished\":\"2022-09-30T23:09:31+00:00\",\"dateModified\":\"2025-09-08T19:40:14+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/2022\\\/09\\\/30\\\/everyone-pays-points\\\/\"},\"wordCount\":457,\"publisher\":{\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/2022\\\/09\\\/30\\\/everyone-pays-points\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/wp-content\\\/uploads\\\/2022\\\/09\\\/Picture2.jpg\",\"articleSection\":[\"Drew Dodds\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/2022\\\/09\\\/30\\\/everyone-pays-points\\\/\",\"url\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/2022\\\/09\\\/30\\\/everyone-pays-points\\\/\",\"name\":\"Everyone pays points!* - Drew Dodds\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/2022\\\/09\\\/30\\\/everyone-pays-points\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/2022\\\/09\\\/30\\\/everyone-pays-points\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/wp-content\\\/uploads\\\/2022\\\/09\\\/Picture2.jpg\",\"datePublished\":\"2022-09-30T23:09:31+00:00\",\"dateModified\":\"2025-09-08T19:40:14+00:00\",\"description\":\"..from any form of communication in the modern world, it's no mystery that\u00a0mortgage rates\u00a0have been moving relentlessly higher in 2022.\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/2022\\\/09\\\/30\\\/everyone-pays-points\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/2022\\\/09\\\/30\\\/everyone-pays-points\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/2022\\\/09\\\/30\\\/everyone-pays-points\\\/#primaryimage\",\"url\":\"\",\"contentUrl\":\"\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/2022\\\/09\\\/30\\\/everyone-pays-points\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Everyone pays points!*\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/#website\",\"url\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/\",\"name\":\"Drew Dodds\",\"description\":\"V.I.P. Mortgage, Inc.\",\"publisher\":{\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/#organization\",\"name\":\"Drew Dodds\",\"url\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/wp-content\\\/uploads\\\/2022\\\/02\\\/VIP-white-logo-proof.png\",\"contentUrl\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/wp-content\\\/uploads\\\/2022\\\/02\\\/VIP-white-logo-proof.png\",\"width\":99,\"height\":64,\"caption\":\"Drew Dodds\"},\"image\":{\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/#\\\/schema\\\/logo\\\/image\\\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/#\\\/schema\\\/person\\\/a9b55d000ca877f53f3b7b733fb26b9b\",\"name\":\"Drew Dodds\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50115a8e87f789bfdaaf8ea95afd5571fb05c1ae4a529b7e221c9d8ac9b4c250?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50115a8e87f789bfdaaf8ea95afd5571fb05c1ae4a529b7e221c9d8ac9b4c250?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50115a8e87f789bfdaaf8ea95afd5571fb05c1ae4a529b7e221c9d8ac9b4c250?s=96&d=mm&r=g\",\"caption\":\"Drew Dodds\"},\"url\":\"https:\\\/\\\/drewdodds.vipmtginc.com\\\/blog\\\/author\\\/drewd\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Everyone pays points!* - Drew Dodds","description":"..from any form of communication in the modern world, it's no mystery that\u00a0mortgage rates\u00a0have been moving relentlessly higher in 2022.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/","og_locale":"en_US","og_type":"article","og_title":"Everyone pays points!* - Drew Dodds","og_description":"..from any form of communication in the modern world, it's no mystery that\u00a0mortgage rates\u00a0have been moving relentlessly higher in 2022.","og_url":"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/","og_site_name":"Drew Dodds","article_published_time":"2022-09-30T23:09:31+00:00","article_modified_time":"2025-09-08T19:40:14+00:00","author":"Drew Dodds","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Drew Dodds","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/#article","isPartOf":{"@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/"},"author":{"name":"Drew Dodds","@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/#\/schema\/person\/a9b55d000ca877f53f3b7b733fb26b9b"},"headline":"Everyone pays points!*","datePublished":"2022-09-30T23:09:31+00:00","dateModified":"2025-09-08T19:40:14+00:00","mainEntityOfPage":{"@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/"},"wordCount":457,"publisher":{"@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/#organization"},"image":{"@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/#primaryimage"},"thumbnailUrl":"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-content\/uploads\/2022\/09\/Picture2.jpg","articleSection":["Drew Dodds"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/","url":"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/","name":"Everyone pays points!* - Drew Dodds","isPartOf":{"@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/#primaryimage"},"image":{"@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/#primaryimage"},"thumbnailUrl":"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-content\/uploads\/2022\/09\/Picture2.jpg","datePublished":"2022-09-30T23:09:31+00:00","dateModified":"2025-09-08T19:40:14+00:00","description":"..from any form of communication in the modern world, it's no mystery that\u00a0mortgage rates\u00a0have been moving relentlessly higher in 2022.","breadcrumb":{"@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/#primaryimage","url":"","contentUrl":""},{"@type":"BreadcrumbList","@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/2022\/09\/30\/everyone-pays-points\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/drewdodds.vipmtginc.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Everyone pays points!*"}]},{"@type":"WebSite","@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/#website","url":"https:\/\/drewdodds.vipmtginc.com\/blog\/","name":"Drew Dodds","description":"V.I.P. Mortgage, Inc.","publisher":{"@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/drewdodds.vipmtginc.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/#organization","name":"Drew Dodds","url":"https:\/\/drewdodds.vipmtginc.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-content\/uploads\/2022\/02\/VIP-white-logo-proof.png","contentUrl":"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-content\/uploads\/2022\/02\/VIP-white-logo-proof.png","width":99,"height":64,"caption":"Drew Dodds"},"image":{"@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/drewdodds.vipmtginc.com\/blog\/#\/schema\/person\/a9b55d000ca877f53f3b7b733fb26b9b","name":"Drew Dodds","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/50115a8e87f789bfdaaf8ea95afd5571fb05c1ae4a529b7e221c9d8ac9b4c250?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/50115a8e87f789bfdaaf8ea95afd5571fb05c1ae4a529b7e221c9d8ac9b4c250?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/50115a8e87f789bfdaaf8ea95afd5571fb05c1ae4a529b7e221c9d8ac9b4c250?s=96&d=mm&r=g","caption":"Drew Dodds"},"url":"https:\/\/drewdodds.vipmtginc.com\/blog\/author\/drewd\/"}]}},"_links":{"self":[{"href":"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-json\/wp\/v2\/posts\/594669","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-json\/wp\/v2\/users\/26"}],"replies":[{"embeddable":true,"href":"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-json\/wp\/v2\/comments?post=594669"}],"version-history":[{"count":1,"href":"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-json\/wp\/v2\/posts\/594669\/revisions"}],"predecessor-version":[{"id":595539,"href":"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-json\/wp\/v2\/posts\/594669\/revisions\/595539"}],"wp:attachment":[{"href":"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-json\/wp\/v2\/media?parent=594669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-json\/wp\/v2\/categories?post=594669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/drewdodds.vipmtginc.com\/blog\/wp-json\/wp\/v2\/tags?post=594669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}