Paying Points: Step-by-Step Guide

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The Paying Points calculator allows you to create different scenarios for mortgage points and credits at closing, offering clear insights to help your clients determine the best option for them.

Calculating Mortgage Points

How to calculate Mortgage Points to provide different scenarios to your clients:


  1. Enter the total home loan amount, annual interest rate (excluding points), and the loan term.
  2. Proceed to the next step by clicking Points .
  3. Input the annual interest rate with points and the total number of points paid.
  4. Click Calculate.

The Upfront Cost/Payment of Points field will be generated along with the Calculator Results section. Below is a review of the three scenarios under Calculator Results:

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  • The first row depicts a scenario without points being paid.
  • The second row illustrates a scenario that includes points.
  • The third row displays the time it takes to recover the points paid if the money was used to reduce the mortgage instead of paying points.

Calculating with Credit

How to calculate scenarios in which credit is applied or not applied toward closing costs with the credit calculator:

  1. Provide the total home loan amount, annual interest rate (excluding credit towards closing costs), and the loan term.
  2. Click Credit.
  3. Input the annual interest rate with the credit included and specify the credit amount.
  4. Click Calculate.

A dollar amount will be automatically calculated for the credit in the Credit ($) field. If you need to edit this amount:

  1. Click into the field and make any adjustments needed. 
  2. Click Calculate to make adjustments to the Calculated Results based on the new credit amount. 

The Calculator Results section will be generated once you click calculate. Below is a review of the two scenarios:

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  •  The first scenario shows the loan without the credit applied.
  • The second scenario demonstrates the loan with the credit applied towards closing costs.

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