Ric's Reference Section

        Points (1% of Loan Amount)

      Interest rates can be reduced by the borrower paying "points", a point being 1% of the loan
      amount. Paying points is equivalent to pre-paying interest, not to be confused with the 1%
      origination fee charge by the lender. The origination fee paid to the lender for processing the
      loan, and is one of several customary closing costs. Points are up-front mortgage interest
      fees paid on a loan to reduce the initial interest rate.

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