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To decide on whether to pay loan points and fees or to choose a no-points, no-cost loan follow the following steps: 1) Figure out your monthly payment with a loan with points and fees. 2) Figure out your monthly payment with a no-point, no-fee loan. 3) Subtract line 1 from line 2. 4)Enter the cost of points and fees. 5)Divide line 4 by the results of line 3 to figure the number of months it would take to recoup your up-front costs. If you expect to own your home for a year longer than the number of months figured in line 5, then you should pay points (and fees) to get a lower interest rate. Otherwise, choose a no-points or no-cost loan.