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This video tutorial explains mortgage points, which are a percentage of the loan amount used to lower your interest rate. Mortgage points can vary (e.g., 0.25%, 0.75%, etc.) and are typically considered a one-time closing cost paid at closing. By paying these points, borrowers can secure a lower interest rate for the life of the loan, leading to potential savings. The video also provides examples and methods for calculating when the upfront costs will benefit the borrower, including determining the recoup time. Overall, it aims to help viewers understand if paying for mortgage points is advantageous for their financial situation.