Origination points are a fee that lenders charge to recoup some of their expenses in making the loan-and to make some profit, too. Ideally, you want to avoid paying any origination points.Some lenders advertise "no points" when trying to get you to apply for a loan. The points in question are actually a percentage point of the amount of the loan. In other words, each point equals 1 percent.

Lenders consider your credit score when deciding whether to charge origination points. If you have a high credit score-over 700 in the FICO system-you probably won't have to pay these points. If your score is in the 600s, you may have to pay one or two; if your score is in the 500s, you may have to pay three or more.

To determine whether to pay discount points, you'll need to get the lender to quote the loan at both interest rates, then see how much you save each month and over the life of the loan. Consider how long you plan to stay in the house; you may not be there long enough to recoup your up-front expense.

Discount points are another matter. In this case, you agree to pay one or more points up front in order to get a better interest rate on your loan. You may even be able to get an interest rate that is below the going rate this way (sometimes called a buy-down mortgage). Discount points aren't tied directly to your credit score.

You also need to consider whether you can afford to pay 1 or 2 percent of your mortgage amount, on top of the down payment, closing costs and fees.