80
As demonstrated in Table 7.5.1, of all site-built single-family closed-end forward mortgages not
primarily for business or commercial purposes, close to two thirds, or 65.7 percent had zero
discount points. About 15.2 percent of loans have discount points between zero and half a point;
8.4 percent have discount points above half a point but below one point. Overall, about 10.8
percent have reported discount points at one point or higher. Generally, as the discount points
increase, the share of loans having discount points within each consecutive discount points
range decreases, i.e. fewer borrowers are paying them. Among different enhanced loan types,
81.3 percent of jumbo loans paid no discount points at all. In comparison, 65.7 percent of
conventional conforming loans, 63.9 percent of FHA loans, 61.6 percent of VA loans and 64.9
percent of RHS/FSA loans paid no discount points. If the range is broadened to include
borrowers who paid less than one point, 97.4 percent of jumbo loan borrowers either paid no
discount points or paid less than one point. That percentage is 89.2 percent for conventional
conforming loans, 88.2 percent for FHA loans, 87.3 percent for VA loans, and 90.7 percent for
RHS/FSA loans.
Table 7.5.2 breaks down, by race/ethnicity, age, neighborhood income, and geography, the
percentages of loans that had reported discount points in incremental ranges relative to the loan
amount. As it shows, 70.3 percent of Asian borrowers and 67.7 percent of non-Hispanic White
borrowers paid no discount points at all. In comparison, 62.4 percent of Black borrowers, 62.5
percent of Hispanic White borrowers, and 60 percent of “Other” borrowers paid no discount
points. The same pattern generally exists in the higher discount point ranges. If the borrowers
that paid no discount points are combined with those that paid less than one discount point,
92.9 percent of Asian borrowers and 90.8 percent of non-Hispanic White borrowers either paid
no discount points or paid less than one point, compared to 86.1 percent of Black borrowers,
88.9 percent of Hispanic White borrowers, and 86.2 percent of “other” borrowers that paid zero
or less than one discount point.
The percentage of borrowers that paid no discount points decreases monotonically with age.
About 72 percent of borrowers younger than 25 paid no discount points. This percentage
decreases to 69.1 percent for borrowers between 25 and 34 years old, 67 percent for borrowers
between 35 and 44, and all the way to 59.5 percent for borrowers older than 74. The same age
pattern exists if borrowers who paid less than one discount point are included. In the same vein,
the older the borrowers become, the more likely that they would pay discount points in the
higher range, relatively.
The borrowers in high-income census tracts (68.0 percent) are more likely than the borrowers
in middle-income tracts (64.6 percent) not to pay any discount points, who in turn are more
likely than the borrowers in low/moderate-income tracts (63.3 percent) not to pay any discount
points. If expanded to include borrowers who paid less than one discount point, the same
pattern exists. The borrowers in high-income census tracts (91.2 percent) are more likely than