Mortgage Glossary

Definitions of Mortgage Terms

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Discount Point Discount Rate Distressed Property

 

• Discount Point - In the mortgage industry, this term is usually used in only in reference to government loans, meaning FHA and VA loans. Discount points refer to any "points" paid in addition to the one percent loan origination fee. A "point" is one percent of the loan amount.
• Discount Rate - The interest rate at which financial institutions that are members of the Federal Reserve System (Fed) may borrow on a short-term basis directly to cover temporary deficiencies in the bank's reserves. Banks borrow from the Fed as a last resort because frequent borrowing would raise concern by bank regulators.
• Distressed Property - Property that is in poor condition, or whose owner is in poor financial condition.