When people want to find out how much their mortgages cost, lenders often give them quotes that include both loan rates and "points."
 What exactly is a point?
A point is a fee equal to 1 percent of the loan amount. A 30-year, $150,000 mortgage might have a rate of 7 percent, but come with a charge of 1 point, or $1,500.
A lender can charge one, two or more points. There are two kinds of points -- discount points and origination points.
Discount points: These are actually prepaid interest on the mortgage loan. The more points you pay, the lower the interest rate on the loan and vice versa. Borrowers typically can pay anywhere from zero to three or four points, depending on how much they want to lower their rates. This kind of point is tax-deductible.
Origination fee: These are charged by the lender either to cover the costs of making the loan or to boost profits. They are not tax-deductible and serve no real purpose for borrowers. Most buyers try to avoid origination points, but may be willing to pay discount points to reduce the interest rate on their loan.
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