What is one potential disadvantage of points?

The potential disadvantage of points is that they represent a one-time upfront cost that can affect short-term savings. When a borrower decides to pay points, they are essentially paying a fee to reduce their interest rate on the loan. While this can lead to lower monthly payments and significant savings over the long term, it also means that the borrower has to front this cash at closing. This initial outlay can be a burden for those who are focused on immediate financial needs, especially if they do not plan to stay in the home long enough to recoup the costs through reduced interest payments. Thus, while lower rates and payments can be beneficial, the upfront expense may not align with a borrower's short-term financial strategy.

The other options do not accurately describe the nature of points or how they impact borrowers. For instance, points do not increase the overall loan value; they are a part of the costs incurred during the loan's closing. Additionally, points do not affect a borrower's credit score directly, nor are they an ongoing monthly payment, but rather a one-time upfront cost.