Should I pay points to lower the rate?
Less points
More points
Loan amount
$
Home Loan Amount
$
Loan amount (adjustable)
Term (years)
Home Loan Term in Years
Term of loan (adjustable)
Interest rate
Interest Rate
%
Loan rate (more points)
%
Origination Charge
$
Origination Charge
$
Origination Charge Amount
Charge For Specific Interest Rate (Points)
Discount Points
%
Discount points (more points)
%
Other settlement services
$
Other Settlement Costs
$
#N/A
Your state + federal tax rate
Tax rate
%
Purchase price
$
Home Value
Yearly property tax
$
Yearly Property Tax
Yearly property insurance
$
Yearly Property Insurance
Years before you sell or pay off loan
Years Before Selling or Loan Payoff
Your savings rate
Rate earned on savings
%
If loans have adjustable rates
Months before first adjustment
Months before first rate adjustment
Months before first rate adjustment (more points)
Months between rate adjustments
Months between rate adjustments
Months between rate adjustments (more points)
Maximum rate adjustment
Maximum rate changed allowed per adjustment
%
Maximum rate changed allowed per adjustment (more points)
%
Minimum rate
Minimum rate
%
Minimum rate (more points)
%
Maximum rate
Maximum rate
%
Maximum rate (more points)
%
Margin
Margin
%
Margin (more points)
%
Index rate
Index rate
%
Index rate (more points)
%
Index rate change per adjustment
Index rate change per adjustment
%
Index rate change per adjustment (more points)
%
Months between index adjustments
Months between index adjustments
Months between index adjustments (more points)
Regarding loan one
Fixed rate mortgage
Adjustable rate mortgage
Interest rates will remain the same
Interest rates will increase
Interest rates will decrease
Regarding loan two
Fixed rate mortgage
Adjustable rate mortgage
Interest rates will remain the same
Interest rates will increase
Interest rates will decrease
Appraisal value:
Appraisal value is the market value of an asset that is derived from the appraisal process. Depending on the asset, the method used to appraise the asset will differ. For homes, appraisers often use a method that includes recent sales data of comparable homes. They may also use the replacement method, which is the cost to replace the home at today's prices.
Interest rate floor:
The minimum interest rate that can be charged on an adjustable interest rate loan during the term of the loan.
Anniversary date:
The periodic date, usually once a year, that the interest rate is reset on an adjustable-rate mortgage.
Lifetime cap:
A lifetime cap is the limit to how much the interest rate on an adjustable-rate loan can be increased over the term of the loan.
Private mortgage insurance (PMI):
An insurance policy that protects lenders against loss if a borrower defaults. Typically required if the loan-to-value (LTV) ratio of the home exceeds 80%.
Interest rate:
The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of money.
Yield:
The annual income provided by a fund, share or bond expressed as a percentage. Yield is normally calculated by dividing the current price of the asset by the income. For example, the yield on a bond that sells for $1,000 and has a coupon rate of 8% is 8%. If the bond price rises to $1,050, the yield falls to 7.62%. If the price drops to $950, the current yield rises to 8.42%. Redemption yield is the interest rate that you are getting if you buy a bond at the current price and hold it until redemption.
Index rate:
An index rate is a widely used, benchmark interest rate that lenders use to set the interest rate on loans and credit cards.
Predicted future interest rate:
Your prediction of the magnitude of change in the interest rate used to price your loan. Future rates are assumed to change at the same rate every year.
Term:
The period of a loan, generally measured in years. Auto loans generally range from 2 to 5 years. Mortgage loans: 15 to 30 years.
Homeowner's insurance:
Protects the homeowner from weather-related damage, as well as potential liability from events that occur on the property. Normally required by lenders.
Adjustable-rate mortgage (ARM):
A type of mortgage loan in which the interest rate paid on the outstanding balance varies according to a specific benchmark.
Property tax:
A tax assessed on real estate by the local government, usually based on the value of the property (including the land) you own.
Property Taxes and Homeowner's Insurance:
A typical monthly mortgage payment consists of amounts for loan principal, interest, property taxes, and homeowner's insurance.
Charge for specific interest rate:
An additional charge, expressed as a percentage of the loan amount, to obtain a lower interest rate.
Margin:
The fixed amount a lender adds to the base rate of an adjustable-rate mortgage to set the loan rate.
Cost-benefit analysis:
An analysis of the cost effectiveness of different alternatives in order to see whether the benefits outweigh the costs.
Periodic rate cap:
The periodic interest rate cap is the maximum amount the loan rate can change on an adjustable-rate mortgage loan on the anniversary date. ARM loan rates are often reset once a year after an initial period. A lifetime cap often exists. A lifetime cap limits the maximum loan rate that can be charged.
Savings interest rate:
The yearly interest rate you earn on your savings.
Treasury bills (T-bills):
U.S. Treasury bills are short-term debt obligations of the U.S. Treasury. T-bills are usually issued to mature in three or six months. Prices for T-bills are stated as a discount to the par value. For example, a T-bill with a price of 99.65 is selling for 99.65% of its par value. T-bills are auctioned weekly and used to pay operations of the federal government. T-bills are considered to be among the safest and most liquid investments.
Spread:
The arithmetic difference between two interest rates, usually stated in basis points. One percentage point consists of 100 basis points.
Months between rate adjustments:
The frequency at which interest rate changes or resets on an adjustable-rate mortgage occur.
Adjustment period:
The initial fixed-interest-rate period on an adjustable rate mortgage loan. For example, a 5-year ARM would have an adjustment period of 60 months.
Tax rates:
The percentage of your taxable income that is owed to the state and federal governments. The tax rate increases as the taxable base amount increases.
Other settlement services:
Fees paid for services associated with the purchase of a home that do not represent compensation to the lender and/or the broker for originating the loan.
Origination Charges:
The sum of all fees and charges from origination-related services. This represents all compensation to the lender and/or broker for originating the loan.
Months between index adjustments:
The frequency of change for the index, the benchmark interest rate to which an adjustable rate mortgage is tied.
Origination fee:
A lender may charge an origination fee that is additional to any mortgage points you pay. Origination fees are the lender's charge for funding your mortgage with a mortgage broker. The process of funding your loan is called origination.
Interest rate cap:
The maximum interest rate that can be charged on an adjustable interest rate loan during the term of the loan.
Down payment:
The cash you deposit towards the purchase of home, car, etc. The larger the down payment, the less you are required to borrow.