Quickly Estimate Your Refinance Savings
With today’s low interest rates, refinancing is more attractive than ever due to the thousands of dollars that can be saved through a lower home interest rate. With the mortgage refinance calculator, you can visualize exactly how much money you can save through refinancing your current mortgage.
Try out the refinance calculator to understand the breakdown of how refinancing will affect your current mortgage. Contact Homesite Mortgage if you have further questions on how refinancing could reduce your annual mortgage expenses by thousands of dollars.
Refinance Calculator Definitions
- Original Interest Rate: The original interest rate is the interest rate that was established in your mortgage when you established your home loan. This is the interest rate that you pay with each monthly mortgage payment, and is locked in unless you choose to refinance to a lower interest rate.
- Original Loan Amount: The original loan amount is the amount you borrowed from your lender in order to purchase your home. The original loan amount is the price of the home, minus your down payment.
- Original Loan Term: The original loan term is the length of your current mortgage. If you signed up for a 15-year mortgage, but want to switch to a 30-year mortgage, that will require refinancing. If you started with a 30-year mortgage, but want to restart the 30-year timeline (in order to take advantage of lower interest rates, or take a lump sum of cash out of your home’s equity), then you’ll want to refinance.
- Time Left to Pay on Original Loan: This is how many months are remaining on your original mortgage.
- New Interest Rate: The new interest rate is the rate you will be locking in with your refinance.
- New Loan Amount:The new loan amount is the amount you’ll be borrowing through the refinance. This amount may go up or down depending on the updated length of your mortgage.
- New Loan Term:The new loan term is the new length of your mortgage that will be established once your refinance closes.
- Term of Loan:The term of loan is the length of time that you’ll be repaying your mortgage. The term of loan will be set up (or re-established if refinancing) when you close on your loan.
- Savings:The figure in the Savings section is how much money you’ll save over the course of your home loan by refinancing to a lower interest rate.
Mortgage Refinance Calculator FAQs
What’s the timeframe to refinance my mortgage?
Similar to the process of acquiring a home loan, the length of your refinance process depends on several factors, such as how accurate and thoroughly-prepared your application is when submitted. To help streamline the process a bit more, do some research of the prices of comparable homes in your neighborhood. Also, get a head start by collecting copies of several documents: two most recent pay stubs, two months worth of bank statements, two years of W-2s or 1099s (if receiving social security or pension income), and two years of federal tax returns. Expect to see your refinance process to take 20–45 days from submitting it to close.
How will my credit score affect my refinance?
Similar to qualifying for a home loan, your credit score still plays a large role in qualifying for a lower interest rate on your refinance. Strive to have a credit score of at least 620 to incur significant savings on your refinance.
How much lower of an interest rate do I need to save money through refinancing?
The general rule of thumb is that the your interest rate should be 2% less than the interest rate of your current mortgage. However, if you plan to be in the home long term, the interest rate can be less than a 2% decrease, and the investment of refinancing will still pay off.
Is it expensive to refinance my mortgage?
No, the cost to refinance your home is very affordable, especially taking into consideration the potential savings you’ll incur after the refinance is in effect. Work with a lender that is upfront and honest with you about closing cost fees and any other additional fees. Often, the “no closing cost” refinance gimmick is just a trick to get you in the door.