Mortgage lenders charge borrowers points as a part of the home-purchasing process.

A point is a fee equal to 1 percent of the loan amount. So, for a 30-year fixed-rate $100,000 mortgage, one point would cost $1,000.

There are two kinds of points: origination points and discount points. Origination points are charged by the lender and cover the cost of making the loan. For a VA loan, the origination fee is capped at 1 point, or 1 percent of the loan amount. Origination points are not tax deductible.
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