Talk:Discount points

message: The issues brought up by the multiple tags were that the article is insufficiently referenced, has a "U.S.-centric" view, and not enough context for clarity to those with no knowledge of finacial matters. Beeblebrox (talk) 00:35, 10 October 2008 (UTC)
thread_title: article issues

message: This article uses simple "flat" math to compute the "break-even point", and consequently the break-even point found by these computations is too early. See Time-value_of_money: any money you pay today (the points) is inherently worth more than money you pay in the future.  —Preceding unsigned comment added by 72.208.30.55 (talk) 22:49, 25 October 2008 (UTC)
replies: text: I was about to make the same comment.  Now on the other hand, 360 months (30 years) - the 47.23 months is the upside, or 312.77 months. Should you keep this loan for 30 years until paid off, you saved $9,933.58 over the life of the loan by paying $1,500 in points (312.77 months x $31.76 monthly savings from lower rate).  Although it's true that you would save just under $10K in nominal terms, that money would be worth considerably less than that in real terms.  Nik42 (talk) 05:40, 17 February 2009 (UTC)
thread_title:  Ignores the "time-value" of money 

message: The history of the "points" game is completely absent. Barefoot through the chollas (talk) 14:24, 19 August 2019 (UTC)
thread_title:  History is of interest here 

message: The following comments were originally posted in the article by an editor at 74.87.25.96; moved from the article to the talk page by Davnor (talk) 22:10, 3 March 2010 (UTC)
thread_title:  Disputed 

message: I have read the definition of service release premium on many internet sites and they all agree with the definition included in Wikipedia.  However, this definition is totally wrong.  The definition of a service release premium is the price a loan servicer is willing to pay for the discounted value of the future cash flows from the servicing fees the servicer will receive during the expected life of the mortgage loan being serviced.  When a lender sells a mortgage to a servicer, the servicer will pay this price to the lender because the servicer will receive future income flows from the servicing fee they charge the investors.  These fees and the price the servicer pays for this future income is not influenced at all by the fluctuations in the market rate of interest on the loans.  The servicing release premium may be the same for two mortgages with the same characteristics, but originated at totally different interest rates.  This premium (SRP) will be the same whether or not the lender offered the borrower a low rate of interest or a high rate of interest.  —Preceding unsigned comment added by Cs170a (talk • contribs) 17:33, 7 March 2010 (UTC)
replies: text: Indented line This is not true. MSR is calculated based on the principal, since the principal left changes with the interest rate it does change with loans terms and resembles an interest only strip. 207.159.80.180 (talk) 20:10, 21 April 2011 (UTC)

text: MSR? Do you even know what is being discussed here?  —Preceding unsigned comment added by 209.6.94.52 (talk) 20:34, 21 April 2011 (UTC)
thread_title:  Agree with Disputed 

message: It is not the case that SRP is not influenced by interest rates. Consider a simple example: a 30-year fixed mortgage originated at 6.5% has a certain servining value if the interest rate is around 6.5%, but a significantly LOWER value if the interest rate is below 5.75% or so. Why lower? Because the risk of early payoff significantly increases as the difference between the current interest rate on a loan and prevailing rates increase (when the prevailing interest rate is lower than the current interest rate). Put simply, when a borrower's interest rate is higher than the prevailing interest rate, borrowers refinance their mortgages. That refinance ends the income stream from servicing on the original loan. Also, SRP does vary based upon the term of the loan and on the type of mortgage loan. SRP is really nothing more than the discounted present value of the servicing revenue over time. Loan term, interest rate, and loan type will dramatically affect SRP values. It is most certainly not a fixed value.  —Preceding unsigned comment added by 68.53.40.80 (talk) 03:50, 18 March 2010 (UTC)
thread_title:  Not Exactly