bona fide . The term bona fide discount point is defined in § 1026.32(b)(3). Only 1.50 additional discount points paid by the consumer to lower the rate is eligible for exclusion from points and fees since the .125 points paid are required to get the starting adjusted rate. However, paying two discount points will not always lower your rate by 50 basis points (0.50%), as you would expect. ... (“TRID”) Rule, the disclosures always need to be made in “good faith”. Services You Cannot Shop For ... (Required/Discount Points (__% of Loan Amount (Points)) Average prime offer rate. 4.125% with 0.125 discount points. 2. 1 bureau of consumer financial protection small entity compliance guide: tila-respa integrated disclosure rule v 5.2 bona fide . Nor will paying three discount points necessarily lower your … 1026.37(f)(1)(i) The points paid to the creditor to reduce the interest rate shall be itemized separately, as both a percentage of the amount of credit extended and a dollar amount, and using the label “__% of Loan Amount (Points).” The consumer agrees to pay 1.625 in discount points to lower the rate to 3.750%. The %of Loan Amount (Points) section is specifically designated for discount point charges. Origination Charges Section B. Refer to the FAMC Discount Points Policy for detailed requirements. TIP = total amount of interest (including prepaid interest). To put an amount in the "% of Loan Amount (Points)" line of the Loan Estimate we have to be able to show that the rate was bought down. Loan Estimate: Disclosing Discount Points QUESTION. Discount Points The number of discount points that can be excluded depends on the loan’s rate: § If the pre-discount rate . Discount points are prepaid finance charges but they are not "interest" for purposes of the TIP. Know Before You Owe (KBYO or TRID) Back. The average prime offer rate for purposes of paragraph (b)(1)(i)(E) of this section is the average prime offer rate that applies to a comparable transaction as of the date the discounted interest rate for the transaction is set. Bona fide discount point. Therefore, the rate and fees set forth on the Loan Estimate (“LE”) must be accurate (to the best of lender’s knowledge) on … Do these points have to meet the definition of bona fide discount point from 1026.32(b)(3)? discount points § If the pre-discount rate . Discount Fee / Discount Points NO; A B; C N/A; YES YES; YES YES; Refer to QM / HOEPA comments Up to 2 bona fide discount points can be exluded provided the loan meets certain requirements. Are discount points paid included in TIP? does not exceed APOR + 1%: you can exclude up to 2 . 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