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Mon Mar 19, 2012
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.
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,