What's a Discount Point?

When a loan officer or someone offering you a loan, talks about discount points, they are referring to a percentage of the loan that must be paid up front. For exampe, 1 point equals 1% of the entire loan amount. If you are required to pay 1 discount point on a $100,000.00 loan, 1 % which is $1000.00 will have to be paid at closing.