Many mortgage company allow you to "buy down" your interest rate of your loan by buying points. A point is equal to 1% of your mortgage amount. You're essentially paying some interest up front in exchange for a lower interest rate over the life of your loan. For this problem, assume base closing costs are $3500. Find the total closing cost (including points) of a $290,000 loan. 6% compounded monthly with 1 point Total closing costs are $