What are points and credits?

Points represent a percentage of your loan amount (1 point = 1%). You might choose to pay points at closing in exchange for a lower interest rate on the loan. In other words, by pre-paying some interest, you are “buying down” your rate.

Conversely, you might choose to receive a credit (or rebate) at closing to help cover other costs and fees. This would correspond to a higher interest rate on the loan.

Not sure what to do? Try our interactive calculator.

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