Mortgage Refinance Calculator | True Quote Mortgage

Mortgage Refinance Calculator

If you believe that your current mortgage terms are no longer optimal for your personal finance situation, than a mortgage refinance may be a savvy move that could save you quite a bit of money.

When you refinance your mortgage, the mortgage refinance lender will pay off your existing home loan and provide you with a new mortgage loan. Ideally, the mortgage refinance will lead to savings through a lower interest rate and lower monthly payments, or you will simply lower the amount of years on your loan term.

But, it’s also possible that mortgage refinancing is not right for you. For instance, if your credit score has lowered from when you took out your first mortgage, than the new refinance rates may be unfavorable and refinancing your mortgage might actually lose you money.

This is why a mortgage refinance is all about the numbers, especially as they apply to you.

Checking out True Quote Mortgage’s mortgage refinance calculator before you commit to the mortgage refinance process will give you an idea as to what level of savings, or losses, you can expect from refinancing.

With our refinance calculator, you can enter in some of your specific information as it relates to your current mortgage, and the calculator will estimate what your new monthly payments would be. Check it out below!

What You Will Need to Use the Mortgage Refinance Calculator

Before using the True Quote Mortgage refinance calculator, you will need a few things that will help determine if a mortgage refinance is the right financial move for you.

 With this information on-hand, simply plug the numbers into the mortgage refinance calculator, and you will see what the mortgage refinance rate will look like, and if you will save or lose money.

You should have the following:

  • Current monthly mortgage payment
  • Current mortgage balance
  • Current mortgage interest rate
  • Remaining mortgage loan term
  • New mortgage interest rate
  • New mortgage loan term
  • Closing costs associated with new mortgage

Use True Quote Mortgage’s Home Affordability Calculator

Refinance Calculator

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Reasons to Refinance Your Mortgage

Hopefully, the True Quote Mortgage refinance calculator gave you a better idea as to how mortgage refinancing would either improve or worsen your mortgage loan terms.

Other than saving money on your monthly home loan payments, a mortgage refinance makes financial sense in a few other instances.

Some of the reasons to refinance your mortgage include:

Get a lower interest rate and lower monthly payments

If you are able to lower your current mortgage rate after refinancing, than you can reduce your monthly mortgage payments if the repayment term stays consistent. You are more likely to get a lower interest rate if your finances, specifically your credit score, have improved.

Eliminate private mortgage insurance (PMI) or FHA mortgage insurance:

Since an ARM can sometimes lead to unpredictable, and even unaffordable, monthly mortgage payments, you can refinance your mortgage to a fixed-rate loan for a locked in interest rate and consistent monthly payments.

Eliminate private mortgage insurance (PMI) or FHA mortgage insurance

PMI is often required for mortgage down payments less than 20%, while FHA mortgage insurance lasts until you have 20% equity in your home. Both will add to the cost of the mortgage and refinancing your mortgage to drop either sometimes can make sense.

Remove another borrower from the mortgage loan

 If your recently divorced spouse’s name is on the mortgage, or if you applied with a friend or relative, you can use a mortgage refinance so that your name is the only one on the new home loan; this also means that only your credit score and income is used in the refinance application process.

Get cash from your home’s equity

If you utilize a cash-out refinance that takes advantage of your home’s equity by refinancing your current mortgage with a larger home loan, you can take out that difference in cash.

Costs That Come With a Mortgage Refinance

There are more than a few added costs associated with the mortgage refinancing process that you must consider because it may cut into how much you can save from refinancing your mortgage.

These mortgage refinancing closing costs are accounted for when you use our mortgage refinance calculator and include the following:

  • Lender fees, like the mortgage application and attorney fees, in addition to loan origination charges
  • Title search and insurance fees
  • Third-party fees, which include things like the costs for a property appraisal, attorney expenses, and a credit check
  • Costs associated with property taxes and homeowners insurance

Understanding the Break-Even Point on a Mortgage Refinance

If closing costs associated with your mortgage refinance begin to rack up, you may be pretty close to the break-even point. The break-even point is found by summing together the mortgage refinancing closing costs and then estimating how long, in years, it will take you to recoup the refinancing closing costs due to your lower monthly mortgage payments.

Essentially, the break-even point is when you will break even on the mortgage refinance closing costs. Mortgage refinancing is a much better financial decision if you have intentions to remain in the home for longer than the break-even point, otherwise you may be losing more money than had you just stuck with your original mortgage.

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