Points are loan fees paid to lenders.
Points may be further classified into origination points or discount points. Origination points are charged by a mortgage company as a fee to process and approve your loan, while discount points are used to buy down the rate of interest. When a mortgage company states that a loan has 2 points be sure to ask them in the 2 points includes both discount and origination points. Back to top. It is commonly used to compare loan programs from different lenders.