Mortgage Refinance Calculator
A mortgage refinance involves replacing your current home loan with a new one, often to take advantage of lower interest rates and sometimes to borrow money against the equity you’ve built in your home. The mortgage refinance calculator below will help you determine how much you could save on your monthly mortgage payment by refinancing as well as what you’re breakeven point would be.
The calculator tool provided is for informational purposes only and does not reflect any specific mortgage or home equity line of credit offered by Leader Bank or any specific terms that may be available for such products. For information on available Leader Bank products and services, please contact a Leader Bank loan officer directly. Examples of monthly payment amounts shown in calculators does not include taxes, insurance or any condominium or HOA fees applicable; as such your total monthly housing payment would be higher. For any adjustable or variable rate loan examples provided, interest rate may increase after consummation and your fully indexed rate, annual percentage rate and monthly principal and interest rates may be higher.
What is a Mortgage Refinance?
As mentioned above, a mortgage refinance is a new home loan which pays off your existing home loan. Like applying for a mortgage, a refinance involves a review of your credit, income, employment, and finances by your lender. Your lender will also conduct a home appraisal to assess the current market value of your home so they can accurately determine the amount of equity you have in your home.
Why Refinance Your Mortgage?
Many homeowners seek to refinance when interest rates drop so they can lower their monthly payment. A refinance can also be used to shorten the term of a mortgage or as a tool for homeowners looking to switch from an adjustable-rate mortgage (ARM) to a conventional fixed-rate mortgage. A cash-out refinance involves borrowing against the equity in your home to get access to funds to achieve a range of goals including consolidating high-interest debt or completing renovations.
What is the Break-Even Point for Refinancing?
One of the first things homeowners will want to consider when determining whether to refinance their mortgage is what their break-even point will be. The break-even point represents how many years it will take you to break even on the closing costs of your refinance from the savings of your new mortgage payment compared to your previous payment amount. Generally, refinancing makes sense only if you plan to stay in your home past the break-even point.
What Are the Costs of Refinancing?
The costs of refinancing will vary by lender, but it’s important to note that some financial institutions (including Leader Bank) offer no-cost refinances. Other lenders will include upfront fees for refinances including application fees, loan origination charges, appraisal fees, and title search and insurance fees. There could also be escrow costs for taxes and insurance associated with your refinance. It goes without saying that when refinancing your loan you should inquire about any upfront cost with your lender so you can factor them in when calculating your break-even point to determine whether a refinance makes sense for you.
