Points are paid when the loan closes, not at the time you apply for the loan. Generally speaking, points are fees added onto loans. One point equals 1 percent of the loan amount.
When you get a loan, you'll have the opportunity to "buy down" the interest rate by paying discount points - essentially paying a fee to lower your interest rate.
By lowering your interest rate, you will be lowering your monthly payment and the amount of interest you'll be paying over the life of the loan. You pay more at the beginning of your loan but will save money in the long run. Keep this in mind as you determine whether to pay points.
Paying points requires a higher immediate expenditure, so it may not be for you. In that case, let the loan do its job - allowing you to borrow the money you need and pay it back as you can.