What does it mean to pay Points on your Mortgage loans? A point is one percentage point if the overall Mortgage loan that is paid up front, usually at the time of Closing.In real estate language it means if the buyer pays Points, it generally lowers the Interest Rate of the Mortgage loan.When determining whether to pay Points or not, the buyer needs to closely examine the length of time that he thinks that he will own the house.If it is less than five to ten years, then it may not be profitable to buy Points.If the life of the loan is over 10 years, then you may be able to save money over the length of the loan.

Points can be financed, if necessary.This will increase the cost of your Points and it will take longer to break even.Check with your accountant because paying for Points on your Home Loan at the time of Closing might be a tax deduction.This applies to new Mortgage loans only.