What are home loan points?
I am a loan officer, so I can tell you from experience that home loan points, specifically the ability to purchase them to lower your effective interest rate on your home loan, are a wonderful thing. It is good you asked. Banks like to offer the ability for you to lower your interest rate. This is not a complimentary service of course, it costs money to do - big money. But, also it is not mandatory. Sometime’s it may not even be in your benefit - check with a professional for advice. But basically a point equals about 1% of your loan. You can pay 1% of your loan to lower the interest rate a full point. Again, how much you can lower your interest rate is up to the bank, but doesn’t usually go more than a point or two.