Not a Member? Join us today!

It's easy to join! Apply for your lifetime Membership with iTHINK Financial in about 10 minutes.

MEET WITH US ON YOUR TIME

Schedule an in-branch or phone appointment at a time convenient for you.

Featured Products

You can turn to iTHINK Financial for the right solutions to all of your financial needs!

Visa® Platinum Credit Cards

Variable rates as low as {{RatePlaceholder}} APR, with no annual, cash advance, or balance transfer fees.

creditcard-icon

Savings Accounts

Start saving for your future today! We offer many savings options to fit the way you live.

Mortgages

Mortgages

When you are ready to make a move, we'll make it easy with a variety of home loan options.

Auto Loan

Vehicle Loans

Get great rates as low as {{RatePlaceholder}} APR, fast approvals and personalized service.

Checking

Checking Accounts

We offer the perfect checking account to match your lifestyle.

Digital Banking

Digital Banking

Our 24/7 online services will simplify your banking. Check balances, deposit checks, transfer funds, pay bills and more, all from your desktop, tablet, or mobile phone.

Should I Pay Points?

By: iTHINK Financial | Jan 08, 2016

What is a Point?

You may have heard people talk about Points and wonder what they are. In the Mortgage World a Point is 1% of the loan amount. Additionally, there are two types of Points which are Discount and Origination Points. Discount Points are fees paid to reduce the interest rate on the promissory note and Origination Points are fees paid to the lending institution providing the loan.

At iTHINK Financial, a Discount Point will buy down the interest rate by ¼ percent. As an example, if the current interest rate on a 30 year fixed rate loan of $100,000.00 is 5.00%, paying one (1) Discount Point will reduce the rate to 4.75%. The Discount Point (which is paid upfront) costs $1,000.00 for the reduction in interest rate for the full term of the promissory note.

In considering Discount Points, it is important to think about how long you plan on keeping the loan. The reason to consider the length of time is because the upfront interest or Discount Point will reduce the monthly payment. A quick calculation of the difference in reduced payment divided by the Discount Point’s cost will tell you how many months it will take to recoup the upfront interest and if it is worth buying the Discount Point(s).

In our $100,000.00 loan example at 5.00%, the mortgage principal and interest payment is $536.82. By paying one (1) Discount Point or $1,000.00 on a $100,000.00 loan, the interest rate is reduced to 4.75% making the monthly principal and interest payment $521.65 or $15.17 less each month. By dividing 1,000 by 15.17, we can calculate the number of months it will take for the Discount Point to recoup its cost. In this example, 65.91 months or 5 ½ years is how long it takes to recoup the Discount Point. For every month after 5 ½ years, the Discount Point will save you $15.17 per month.

The total savings over the life of the loan can be calculated using the remainder of the term of the loan from the month the Discount Point was recouped. In our example, there are 24 ½ years or 294 months after the month the Discount Point was recouped. Calculating the total benefit, is as easy as multiplying 15.17 by 294 which is $4,459.98. This calculation assumes you don’t refinance and don’t pay extra payments over the life of the loan.

For more information about Discount Points, contact your knowledgeable Credit Union Mortgage Loan Officers at 800.873.5100, ext. 7722 or mortgage@ithinkfi.org. Additionally, you may wish to contact your tax advisor as Discount Points may be tax deductible and should be considered when doing tax planning.

Upcoming Events

Check out the upcoming events happening at iTHINK Financial.

nov 14

WEALTH MANAGEMENT WEBINAR - SOCIAL SECURITY AND YOUR RETIREMENT

NOVEMBER 14TH, 2024 @ 11:00AM - 12:00PM

nov 20

Business Webinar - One Legal Mistake Can Ruin Your Business

NOVEMBER 20TH, 2024 @ 8:00AM - 9:00AM

nov 28

Thanksgiving Day Closure

NOVEMBER 28TH, 2024

dec 18

Business Webinar - Social Media Marketing Essentials

DECEMBER 18TH, 2024 @ 12:00PM - 1:00PM

dec 25

Christmas Day Closure

DECEMBER 25TH, 2024

Quick Pay and Skip-A-Pay

Make a loan payment or skip your upcoming loan payment without logging in to Online Banking!

CC_WPB_PromoButton