What are points?
A point is a percentage of the loan amount, or 1-point = 1% of the loan. So one point on a $100,000 loan is $1,000. There are 2 types of points - 1) Origination Points - these are paid to the lender just to originate the loan. We do not charge origination points. 2) Discount Points - fees used to lower the interest rate on a mortgage loan by paying some of this interest up-front. The borrower decides if they want to make this exchange.
Lenders may refer to these costs in terms of basis points, which are in hundredths of a percent - 100 basis points = 1 point, or 1% of the loan amount.