Points, in the context of real property sales, are additional amounts charged on the financing of real property sales. Points are a method for lenders to make the loan more competitive with the yield of other investments without violating laws governing maximum allowable interest rates. One point is equal to 1% of the loan amount. Points may also be called a Loan Origination Fee, Commitment Fee, Discount Fee, Warehousing Fee, Funding Fee, etc. The number of points charged vary and are set by the individual lender. In a conventional mortgage, points can be paid by the buyer, the seller, or split between the two.
