Who is responsible for the payment of points in a loan agreement?

In a loan agreement, points typically refer to prepaid interest or fees paid to the lender at closing. The responsibility for paying points usually falls on the borrower, which in this context is the buyer. When a buyer decides to pay points, they are essentially giving the lender a lump sum payment upfront to lower their interest rate over the life of the loan.

This payment structure is designed to help the buyer achieve a lower monthly payment, but it is strictly a part of the buyer's obligations within the agreement. While there are scenarios where points can be negotiated to be paid by the seller as part of a seller concession, the standard and primary responsibility lies with the buyer in such arrangements. Thus, recognizing the buyer as the one responsible for this cost aligns with typical real estate and loan contract practices.