jumpy movements with transform.position

var buildingObject : GameObject;
var myGround : Transform;
var smooth = 5.0;

function Update () {
        checkForBuilding();
}

function checkForBuilding() {
        var ray = Camera.main.ScreenPointToRay (Input.mousePosition);
        var hit : RaycastHit;
         if (Physics.Raycast (ray, hit, 100.00) && hit.collider.gameObject.CompareTag("CursorSnap")){
                buildingObject.transform.position = hit.point;
        }

}

This is my script, the problem i'm experiencing is that the object being moved around has some very jumpy movements. I tried to use a Vector3.Lerp to smooth the movement, but that didn't solve the problem.

What is your goal, to move something around on screen by dragging it? If so, I would expect this behavior from your script. It will reposition the object's origin to the hit point. Next frame, it will do that again. The only smooth movement you might get is if you are dragging near the origin, and the geometry was such that the origin were somewhat un-occluded... Anyway, it's not gonna work well. If you're trying to move something around by dragging it, look for the runtime handles demo, or other forum/questions concerning dragging objects at runtime. I think they involve dragging along a plane that is normal to the current camera vector.