does not exceed APOR + 2%: you can exclude up to 1 . However, paying two discount points will not always lower your rate by 50 basis points (0.50%), as you would expect. Services You Cannot Shop For ... (Required/Discount Points (__% of Loan Amount (Points)) If the bank charged 1% and only lowered the rate by .125 of a percent, that probably wouldn't be bona fide, but could it still show on the Points line? Origination Charges Section B. bona fide . Discount points are prepaid finance charges but they are not "interest" for purposes of the TIP. TRID Fee Placement and Tolerance Chart As of 1/1/2016 By VS Loan Estimate ZERO Tolerance 10% Tolerance NO Tolerance Requirement Section A. Therefore, the rate and fees set forth on the Loan Estimate (“LE”) must be accurate (to the best of lender’s knowledge) on … 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. discount point … However, the QM Rule dos allow the following exclusions: up to two bona discount points paid by the consumer in connection with the loan if the loan's interest rate, without any discount… 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. The %of Loan Amount (Points) section is specifically designated for discount point charges. 4.125% with 0.125 discount points. bona fide . TIP = total amount of interest (including prepaid interest). Know Before You Owe (KBYO or TRID) Back. Average prime offer rate. Do these points have to meet the definition of bona fide discount point from 1026.32(b)(3)? 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. Loan Estimate: Disclosing Discount Points QUESTION. does not exceed APOR + 1%: you can exclude up to 2 . Nor will paying three discount points necessarily lower your … ... (“TRID”) Rule, the disclosures always need to be made in “good faith”. 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 term bona fide discount point is defined in § 1026.32(b)(3). Are discount points paid included in TIP? 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