Discount Points Explained: How to Analyze Points?

Have any questions or want to talk about your situation? Let's chat! Schedule a call: https://calendly.com/juleef/let-s-say-hi 📞Text or call 📞: 503-799-3711 To apply: https://rate.com/juleef Lending wherever you want to call “home” 🏠❤️ -- in all 50 states. In this video: 00:00 - Introduction: Why points matter 00:28 - How to approach this video 01:10 - Reach out if you have any questions — I am an actual loan officer 01:26 - !!! First things first: what are discount points? 01:47 - !!! The math behind discount points 02:35 - !!! When does a discount point become a lender credit? 03:16 - !!! Easy way to think of discount points 04:05 - !!! Are discount points always desirable? 04:37 - A little back story on discount points 09:59 - Do lenders make more money by selling discount points? 10:25 - !!! There are many combinations of rate and point options to choose from 11:47 - We can’t talk about discount points without talking about LLPAs 12:48 - Here is the full LLPA table 14:17 - Let’s talk about how points get paid and who pays them 15:12 - !!! THE MOST IMPORTANT PART OF THIS VIDEO 15:45 - !!! Use “math” and “time” to frame your analysis of whether points are a good or bad deal 16:02 - !!! The math: cash flow 16:43 - !!! The Math: Amortization 17:13 - !!! The Math: Interest rate 17:29 - The math: tax savings 18:16 - Making the analysis easy - let a spreadsheet do the work 19:04 - !!! How does “time” factor into the analysis? 20:04 - !!! Time and interest rates (are they coming back down?) (when?) 20:37 - !!! Finding the right balance 21:27 - Important consideration: are you planning to pay off a large part of your loan soon after closing? 22:15 - Did I mention that I have a spreadsheet for this? 22:46 - !!! Focus on the lowest cost in dollars over the time you expect to have your home 22:59 - CASE STUDY: Analyzing points using a spreadsheet 35:35 - Getting help with the analysis of points #interestratebuydown #DiscountPoints #interestratehacks #RealEstateFinance #HomeLoanTips #MortgageEducation #financialliteracy Julee Felsman, SVP of Mortgage Lending NMLS 120831 Guaranteed Rate Inc NMLS 2611 Equal Housing Lender. www.nmlsconsumeraccess.org www.rate.com/licensing www.rate.com/privacy Branch address: 1300 SE Stark St Ste 111, Portland, OR 97214 State Licenses: AK - AK120831, AL - 73482, AR - 117882, AZ - 1002329, CA - CA-DBO120831, CO - 100514850, CT - LO-120831, DC - MLO120831, DE - MLO - 120831, FL - LO66603, GA - 67474, HI - HI-120831, IA - 34589, ID - MLO-2080120831, IL - 031.0056868, IN - 42483, KS - LO.0039957, KY - MC713848, LA - Licensed, MA - MLO120831, MD - 120831, ME - Licensed, MI - 120831, MN - MN-MLO-120831, MO - MO-120831, MS - 120831, MT - 120831, NC - I-187748, ND - NDMLO120831, NE - Licensed, NH - Licensed, NJ - Licensed, NM - Licensed, NV - 65660, NY - Licensed, OH - MLO-OH.120831, OK - MLO21956, OR - Licensed, PA - 74700, RI - Licensed, SC - MLO - 120831, SD - MLO.09183, TN - 203658, TX - Licensed, UT - 12003187, VA - MLO-41738VA, VT - VT120831, WA - MLO-120831, WI - 120831, WV - LO-120831, WY - 8673 Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Guaranteed Rate for current rates and for more information. Sample rate provided for illustration purposes only and is not intended to provide mortgage or other financial advice specific to the circumstances of any individual and should not be relied upon in that regard. Guaranteed Rate, Inc. cannot predict where rates will be in the future. By refinancing, you may pay more in costs and interest over the extended term. All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate, Inc. does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Content found in these videos is public information. However, all information including text, photographs, etc. is copyrighted and is protected by United States and international copyright laws. These videos may not be used, reproduced, or distributed for commercial purposes without prior written consent from Julee Felsman and Guaranteed Rate.