Talking about your mortgage: Points
Points are a one-time charge imposed by the lender, usually to reduce the interest
rate of your loan. One point equals 1% of the loan amount. For example, 1 point
on a $100,000 loan would be $1,000. In some cases--especially in refinancing--the
points can be financed by adding them to the amount that you borrow. However,
if you pay the points at settlement, they are deductible on your income taxes
in the year they are paid (different deduction rules apply when you refinance
or purchase a second home). In your purchase offer, you may want to negotiate
with the seller to have the seller pay your points.
Estimated cost: 0% to 3% of the loan amount
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