Length of ownership and break even point - how long does it takes to break even on the expense of the points vs. the value of owning "that" home.

The more desire for the home and the longer the stay, the more they are worth. Most 3-5 year buyers will not see the value in paying points as much as 5-20 year buyers.

I also consult with my lender on this, so please see Jason E. Gordon's answer below... 

Crunch th enumbers.  learn how.  it is easy using a excel spread sheet.  Your lender of choice might/should be able to help you.

Crunch some numbers; they usually ARE NOT. Your lender should help you.

I don't Kris Anderson , I leave that up to the Borrower and their lender.

Everybody's situation is likely a bit different, I count on trusted lenders to advise my clients properly on whether or not the points would be worth it for their situation.

That is a discussion to be had with their lender who can explain how long it will take to break even. It may also be beneficial for the buyer to have a discussion with their tax professional. 

How long buyers recoup their money from the buydown. Seems to work better with buyers that want to make their home a forever/long term home.

I recommend consultation with a lender to provide the information to help the borrower select the best path.

I dont, however those who do probably have a spreadsheet to determine which way is best.

It depends upon the benefits received by paying the points. Compare with alternatives. 

Will have to park on this one and see what others say and what I can learn

Best recommendation would be to consult with your Lender ...

Paying Points brings to mind two factors'; 1- The Cost 2- How long does the borrower plan on living in the house.  My wife and I have lived in our homes for an average of fifteen years so the lowest interest rate makes sense to us. Most people live in their homes for closer to three years so paying points doesn't makes much sense in most circumstances.

Capital markets for lenders (the Wizard of Oz at a desk who prices loans based on the ten year, what MBS is buying, and how many puzzle pieces can fit to replace deals in a tranche) generally price points to break even in more than 60 months. There is NO BARGAIN paying points. The upfront cost is huge and then sunk if rates come down and they refinance. Send me the numbers I can send you graphs, calculations and a visual way of deciding that paying one percent of a loan probably doesn't make sense. Payment difference for an eighth or sixteenth will be nominal. 

It's all about the numbers! See what Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets said.

At a basic level, if the cost is worth the savings.  Typically, a 1% charge results in a .25 reduction to interest rate - if, for example, on a given day, you can get a .125 reduction in rate with a charge of .125 points, it's almost always worth it to pay.

Time in the house doesn't matter in the considering - TIME WITH THE LOAN DOES.  Rates have ebbed and flowed, trending downward, since the 80s - - most people have their mortgage less than 5 years.  If you paid points today and stayed in the house 20 years, that would be a bad gauge on whether or not it's worth it, because if rates drop in 6 months and you refinance, the points would be a waste.

How long you'll hold the loan, the total cost, and the total savings are the considerations someone needs to make.

Length of intent to own and how long to recover initial cost.  Add to that, tax deductibility (purchase vs. refi).  

Depends on how long you will be there.  My next house will likely be my last house so could be very important.

I don't.  I leave that sort of thing up to my trusted lenders.

Simple break-even analysis.  Let's say for example you are weighing 2 options on a $400K loan amount:

1) 5.000% with 0 points (P+I payment = $2147.29)

2) 4.750 with 1 point (P+I payment = $2086.59)

Cost difference = $4000 

Payment difference = $60.70

$4000 extra cost to save $60.70 per month = 65.90 months (5.49 years) to break-even. 

NOTE: there are other ways to calculate whether points are a good idea...this is just a sample.

I recommend to my buyers to call two or three lenders, and get the scoop in order to make good decisions.

The long term property owner may benefit, but those staying 7 years or less likely not. Sometimes a buy down can benefit a buyer to qualify because of ratios. A decision made individually based on circumstances.

I let my lender look at the clients personal information and intentions and help them decide. It really all depends on how long they're going to own the house and keep the mortgage.

There are only two ways Kris Anderson ...1. math and its results don't lie and 2. the persons emotions as in I want this and that is that! 

Breakeven calculation

I’m not typically a fan of pre-paying things. Depends on each individual situation and what their plans are. Banks already get enough of people’s money, so I’m not an advocate to give them more money.

It is a case-by-case basis. It worked well for me back in 1998 because I've been in my home for over 20 years.