Points paid at closing are:

A is incorrect because points are not the same as the down payment. The down payment is the buyer's equity contribution, while points are prepaid interest paid to the lender to buy down the interest rate.

C is incorrect because points are not applied to the principal balance. They are prepaid interest that buys down the interest rate over the life of the loan, not a reduction of the loan amount itself.

D is incorrect because points are not refundable if the loan is paid early. They represent prepaid interest for the full term of the loan and are considered a cost of obtaining that specific interest rate.