Mortgage Broker or Lender, Louisville, KY
Points are pre-paid interest. Not the same as an origination fee, often confused even by Realtors and newbie loan officers. With current rates as low as they are today I rarely get asked about points to buy down the rate.
Points are basically up front fees, also known as discount points. Instead of charging a higher interest rate they charge points as loan origination fees. One point is one percent of the amount borrowed. Let me know if there is anything else I can help you with.
A point is 1% of your mortgage amount. Some say it is prepaid interest which should lower your interest rate however it is also how the loan officer get paid so compare between a couple of companies. A good local and trusted bank or mortgage company is always a great place to start,