suppose you want to borrow $220,000 to purchase a house. two banks, wells fargo and bank of america, are willing to lend you the money. both banks will amortize the loan over 30 years and the payments will be monthly. wells fargo will lend you the money at 4.5% with 0.5 points. bank of america will lend you the money at 4.25% but will charge 2 points.
