This fee covers the administrative costs of processing the loan. Often expressed as a percentage of the loan. Each "point" is equal to 1% of the mortgage loan amount. For example, if you get a mortgage loan for $100,000, one point is equal to 1% of $100,000 or $1000. Generally the buyer pays this fee unless other arrangements have been made with the seller and written into the sales contract. Discount Points can also be used to pay this fee.