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.