Paying points or not paying points, that is the question. I found an interesting article yesterday written by Barry Habib from the Mortgage Market Guide, Don't Pay Points, Please! who urges borrowers not to pay points. Instead, he suggests you invest the money, pay down other debt, or put the money towards a bigger down payment.

What is a point? In short, a point is pre-paid interest. One point equals one percent of the loan amount and each point paid reduces your interest rate, on average, one quarter of one percentage point.

Why does Barry urge hom buyers not to pay points? Read my entire post, Paying Points for Your San Mateo County Mortgage for a detailed explanation and break down of how long it will take to recoup your money.