Points of mortgages – how do they work?

I think I know things, but I’m not sure. I have appreciated for a mortgage with an interest rate of 6.625% and on good faith, it is called “% Discount Points@0.438 ready” and said it would cost $ 876 have been pre-approved. Does this mean I can pay $ 876 to lower the interest rate of 0.438%, so I would therefore take an interest rate of 6.187%? Or does that mean I have to pay the $ 876, 6.625% in the first place and if I do not get my interest rate is 0.438% more? We bought a house with our son on November 8 and pay for an item on the loan. Nothing has been said the last tax year since November and the closure was not paid enough. May be claimed points this year. So I’m really insurance PMI can be claimed.

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