Advice about discount points at closing

[Ryan Brooks]

I’m being charged 2.85% for discount points at closing on a secondary/vacation home mortgage. Seems a bit high. Can someone please advise?

I live in the northeast but I’m purchasing in SC where taxes are considerably lower, so I assumed closing costs would be less, but they’re turning out to be about the same with this fee!

[Eric Hobbs]

@Ryan Brooks

Mortgage Broker here. Points on traditional investment property financing i.e. Fannie Mae/Freddie Mac loans now have an imposed fee (pricing) which makes these loans a lot more expensive. So, in short yes these types of loans do not come with 0 points anymore. Effective in April 2022, but it was priced into the market a little before. A primary residence loan does not have this as standard.