There are three considerations in determining the price of a loan. These considerations are the contract rate quoted, the amount of points and/or origination fees associated with that rate, and the length of time the lender will promise to deliver that price to you. For example, two lenders could quote to you a 30-year fixed rate at 8%. However, one lender will quote 1.5 points and guarantee that day's rate for 30 days. The other lender will quote only 1 point but will not guarantee the rate at all. The rate could easily change before you have a chance to close the transaction. So which is the better price? Also see the discussion of APR.

 

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