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View Full Version : Bases points as it relates to rates


youngy029
May 13, 2008, 01:07 PM
What is the best way to explain "base points" to someone that is not money savey?

Fastfun1
May 17, 2008, 07:00 PM
Basis points are applied, or removed, in .125% increments to raise or lower one's interest rate. If basis points are applied, the rate ill be lowered, but closing costs will be increased. If basis points are removed, the rate will increase, but closing costs will decrease. One basis point is equal to one percent of the loan's value, i.e. you borrow $100,000 @ 1.00 basis points, your basis points = $1,000.

lcoleman66
Aug 11, 2008, 12:31 PM
How do I calculat bases points

Fastfun1
Aug 11, 2008, 05:49 PM
1 basis point = 1.00% of a loan's volume.
I.E.
$100,000 x .01 = $1,000