Points are loan fees paid to lenders. 1 point=1% of the loan amount. Therefore, on a $100,000 loan 1 point is $1,000. Points may be further classified as 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.
It is your decision whether to pay points or have a higher rate, however several other factors are important in making this choice. Contact your sales representative to see which option is the best for your situation.