While I know "of" the loan process, it's best to consult with and John (below) is correct.

I think the term "point" is shorthand lingo for "percentage point" -- because that's exactly what it is. It's a mouthful to keep saying "percentage point, percentage point," so I bet the industry just started calling it a point -- at some point . . . LOL

But "a point" is one percentage point of the funds that are borrowed.

If you need (two great) referrals contact:

Willie Williams or Nevin Williams -- no relation.

Nevin Willians is with First Priorty - they are a mortgage broker/bank (916) 802-9743 Cell
Willie Williams is with Well Fargo -- they are a direct lender. (971) 235-9447 Cell

Both are EQUALLY GREAT guys and will give you top notch customer service. Contact them with your questions.

Carla Muss-Jacobs, Principal Broker/Owner
EBA Portland, LLC
Exclusive Buyers' Agent
Assisting Buyers in Metro Portland since 1999
http://www.EBAPortland.com

Well you have a great answer with John- great explaination. You may want to check with a few lenders to see what their closing costs are going to be. They are all charging different fees so make sure you are compare apples with apples...so you can tell which is giving you the best deal! Good luck with your refi!

One point is equal to 1% of your loan amount. They are usually charged by a lender to buy down the interest rate on your loan and are a closing cost which on a "refinance" can often be rolled into your new loan amount. However, be careful in paying points. It may seem painless if they are being rolled into your new loan but the benefit in paying them may be marginal. Ask your lender why they are being charged. If its to lower your rate, ask the lender to calculate your payment at a rate with no discount points and compare it to the payment with the points. The benefit may be marginal. When it comes to cost on a refi, always look at the cost/benefit of any expense. Your payment may be going down but your upfront costs may take too long to pay back from your savings in the payment.