Refinancing Home Mortgage Calculator - 3 Types of Information You Will Need to Prepare

Refinancing your home simply means taking out a new mortgage in place of your existing one

. The new loan will have to have more favorable terms than does your existing loan in order for it to make sense for you to refinance.

There are many reasons people choose to refinance their home mortgage, but primarily the reasons boil down to at least one of these three:

a. You are able to qualify for a lower interest rate now than you did when you first took out your loan. This is usually due to your now having a better credit score or to the fact that interest rates in general are down relative to where they were when you took our your existing mortgage.

b. You want to cash out some of the equity in your home, thereby taking out a new loan and using some of that cash for other expenses.

c. You want to take out a new loan with a longer or shorter repayment term. Usually, a longer repayment term means lower monthly payments but higher interest paid over the life of the loan, while a shorter repayment term means the opposite.

If you want to refinance your home loan and are looking for a refinancing home mortgage calculator, here are 3 types of information that you will need to prepare before using a refinance calculator:

1. The terms of your existing loan:

To use the calculator properly, you will need to prepare the following information about your current loan: current monthly payment, balance left on your existing mortgage, years left on your current loan, and your current interest rate.

2. The terms of your new loan:

Meanwhile, regarding your would-be new refinance loan, prepare this information: your new interest rate and the number of years of your new loan.

3. The costs of your new loan:

One of the most important factors in how long it will take you to recoup the costs of your refinance is the total cost of your new loan. Key considerations that the calculator will likely ask for include which affect that part of the calculation are: points (% of loan principal paid as a fee), application fee, attorneys' fees (both yours and lender's), title search, appraisal fee, local fees, credit check, title insurance, inspections and document preparation.

In return, the calculator will tell you what you want to know, which is namely: a. how much you stand to save in monthly payments with your new loan, b. the total cost of the loan, and c. the total number of months required to recoup the cost of your refinance.

Be sure to prepare these data elements before using a home refinance calculator.

Refinancing Home Mortgage Calculator - 3 Types of Information You Will Need to Prepare

By: Susan Willis

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