Points are how the lenders and brokers make thier money.
Mortgage brokers collect a certain percentage of the loan amount as commission and is usually included in the points you are charged. Lenders charge points as a way of making their fee for lending the money and to off set the cost of doing business and re-coup their costs for obtaining funds to make loans. Points will vary with the interest rate. The lower the rate the higher the points. It is not always best to pay higher points for the lowest rate.