Calculate Your Savings with the Discount Point Calculator
When you’re in the market for a new home or refinancing your existing mortgage, you might come across the term “discount points.” Discount points are a way to lower your interest rate and save money over the life of your loan, but they can also increase your upfront closing costs. To help you make an informed decision, we’ve created a Discount Point Calculator that simplifies the process of calculating your potential savings. In this article, we’ll guide you through using this calculator and provide the necessary HTML and JavaScript code to implement it on your website.
Understanding Discount Points
Before we delve into the calculator, let’s briefly explain what discount points are. A discount point, also known as a mortgage point, is essentially prepaid interest on a loan. When you purchase discount points from your lender, you’re paying a percentage of your total loan amount upfront in exchange for a lower interest rate on your mortgage.
Each discount point typically costs 1% of your loan amount and can reduce your interest rate by about 0.25%. For example, if you have a $200,000 loan and buy two discount points, you’ll pay $4,000 upfront, but your interest rate may drop from 4.5% to 4.0%. Over the life of your loan, this can lead to substantial savings on your monthly mortgage payments.
Using the Discount Point Calculator
Now that you have a basic understanding of discount points, let’s see how our Discount Point Calculator works. This calculator helps you determine whether purchasing discount points is a financially sound decision based on your specific loan amount and the number of points you’re considering.
To use the calculator, follow these simple steps:
- Enter the total loan amount ($): In the first input field, input the total loan amount you’re seeking. For example, if you’re looking for a $250,000 mortgage, enter 250000.
- Number of discount points purchased: In the second input field, specify the number of discount points you’re considering. If you’re unsure, you can start by entering 0 for no points, and then adjust as needed.
- Calculate your savings: Click the “Calculate” button, and the calculator will instantly display your potential savings over the life of your loan, including the reduced monthly payment and the total amount saved.
Conclusion
Incorporating a Discount Point Calculator on your website can be a helpful resource for your audience, especially if they are in the process of securing a mortgage or refinancing their home. With the provided HTML and JavaScript code, you can easily add this interactive tool to your site, allowing users to explore the benefits of discount points and make more informed financial decisions.