What are points, and how much do they cost? "Points" are really cal…

What are points, and how much do they cost? "Points" are really called "Discount Points." Technically, they're considered pre-paid interest. Functionally, they buy a lower interest rate on your loan. One point = 1% of the loan amount. Example – 1 point on a loan of $100,000 = $1,000 Should I pay them? Divide the upfront cost by the monthly savings to determine the break-even period. If you intend to own the property beyond that time, you have the initial basis for a decision. Example –