Using Points Analysis to Compare Rate Buydown Options

Overview

Points Analysis lets you compare different rate buydown options side-by-side, showing not just the payment difference but the true financial benefit including amortization gain. Instead of building out three complete scenarios to answer a client's "what if I bought down the rate?" question, you can run this analysis in seconds and generate a client-ready PDF.

Before You Start

Requirement	Details
Active deal	You need a deal already created with loan amount, down payment, and base interest rate entered
Current rate sheet	Know the point costs for your target rates from today's pricing
Client's base scenario	Your starting scenario should reflect their current rate with zero points

Step-by-Step: Running a Points Analysis

1. Access the Analysis Tool

Navigate to the Control Center at the bottom of your deal
Click the Analysis button
Select Points Analysis from the menu

2. Enter Your First Comparison Rate

Field	What to Enter
Rate	The lower interest rate you want to compare (e.g., drop from 6.625% to 6.125%)
Points Cost	The discount points required from your rate sheet (e.g., 1.5 points)

3. Add Additional Rate Options (Optional)

Enter a second comparison rate if you want to show multiple buydown options
This is useful when you want to show a "five handle" rate (anything starting with 5.xx%) as a psychological anchor

💡 Tip: Showing a rate just under a whole number (like 5.99% instead of 6.0%) can be more appealing to clients even if the math is similar.

4. Click Analyze

The system calculates and displays a comparison showing your base scenario against each buydown option.

Understanding the Results

What the Analysis Shows

Metric	What It Means
Payment Difference	The basic P&I savings per month (what any mortgage calculator shows)
First Payment Principal	How much of the first payment goes toward principal at each rate
Amortization Gain	The additional principal paydown you get at the lower rate
Total Monthly Benefit	Payment savings PLUS amortization gain combined
Break-Even Period	How many months until the point cost pays for itself

The Amortization Gain Advantage

This is where Points Analysis differentiates you from competitors using basic calculators. When your client pays a lower interest rate on the same loan amount, more of each payment goes toward principal rather than interest.

Example from a real scenario:

At 6.625%: First payment principal = $576
At 6.125%: First payment principal = $634
Amortization gain = $58/month additional equity building

This hidden benefit shortens the break-even period and increases the true value of buying points.

Presenting to Your Client

1. Generate the PDF

Click the Generate PDF button directly from the analysis screen
The PDF includes all comparison data in a clean, client-friendly format

2. Frame the Conversation

⚠️ Important: Always tie the break-even period to the client's plans. Ask: "How long do you plan to stay in this home?"

Use language like:

"If you'll be in the house longer than [break-even months], buying points puts money back in your pocket every month after that."
"This also takes some pressure off waiting for rates to drop for a refinance, since you're already locked into a great rate."

3. Let Them Choose

Send the PDF and position yourself as an advisor, not a salesperson. The data speaks for itself.

Quick Reference

Control Center → Analysis → Points Analysis → Enter rate & points → Analyze → Generate PDF → Send to client

Tips for Success

Check your rate sheet first—know the exact point costs before running the analysis so your numbers are accurate
Show two options when possible—giving clients a choice between "good" and "better" rates increases engagement
Lead with total monthly benefit—the combined payment savings plus amortization gain tells a more compelling story than payment difference alone
Use break-even as the decision point—clients understand "you'll recover this cost in X months" better than complex financial explanations
Consider the refi conversation—pointing out that buying down now reduces dependence on future rate drops can help clients feel confident in their decision