• What are points?
Points are interest fees paid on a loan that reduce your monthly interest rate by requiring prepayment of a small percentage of the total interest due. The number of points owed is up to your lender.  For instance, a one point loan will always have a lower interest rate than a no point loan.  Each point equals 1% of the total loan amount.

• So are points good or bad?
It depends on how long you are looking to keep the loan.  We suggest paying points up front if you plan on keeping the loan for atleast four years to ensure that you recoup the costs through lower monthly payments. Another benefit to points is that they Are tax deductible.

However, if you think that you might move within the next four years or might  want to refinance because the market rate is declining, then you probably would be better off with a no point loan.