I am currently studying for my FL exam which I plan on taking next month, since I am moving there at the end of October.

I have a question about discount points that has always confused me. I just spent an hour reading up on them on the internet, but can't seem to find the answer to this rather simple question.

How and when do you buy discount points? Does the buyer pay for them in cash at the closing? Or is the cost to buy the points rolled into the loan amount and the interest lowered?

Thanks,
Aaron

Typically paid by the Buyer (Mortgagor);

In the robust market of 2005-07, sometimes rolled into the Principal Morthage Amount, still paid by the Buyer;

Sometimes paid by the Seller as a Concession, or help with Buyer's Closing Costs.

Paid at the time of Closing, by someone, somehow . . . . NOT at Loan Application time; but always for the benefit of the Buyer.

Points are argued to be a poor investment unless you were certain to keep that Mortgage for 5 years or more/ but the Time/Cost or Present Value of Money and has to be evaluated on a case-by-case basis.