POINT:
A point is one percent of the loan amount. Sometimes referred to as "discount points," they are a one-time loan fee assessed by the lender to increase the yield on a mortgage loan.

Points are charged by a lender when money is tight, interest rates are high, or there is a legal limit on the interest rate that can be charged. Increasing the yield from a mortgage loan through the use of points allows it to become competitive with the yield on other types of investments. Buyers (borrowers) are prohibited from paying points on FHA and VA guaranteed loans; however, the points can be paid by the seller. On a conventional mortgage, points may be paid by the buyer, the seller, or split between the two parties. Many of the words covered in a loan or refinance may be foreign to some borrowers. Some of the words that will appear in the loan closing statemnt are described below:

APPRAISAL FEE - A fee charged to appraise the true value of the home for loan purposes.
CREDIT REPORT - A lender requirement regarding the borrower's prior credit activity and payment history.
DOCUMENTATION PREP - The drawing of loan documents. LOAN TIE-IN FEE - A work fee charged for processing a loan in connection with the total transaction.
PROCESSING FEE - A fee charged for work done when processing the loan for appoval.
POINTS - Description is covered above.
RECORDING FEES - The charges for recording loan documents at the County Recorder's office.
SETTLEMENT FEES - The final charges required by parties to the loan transaction.
SUB-ESCROW - A work fee for pay off of the old loan.
TITLE INSURANCE - The insurance covering the title as required by the lender to protect the lender and/or the borrower.
TAX SERVICE - A service required by the lender to furnish real estate tax information during the term of the loan.