Refinance Calculator

Should I Refinance My Mortgage?

Key Considerations:

• How long will you stay in your home? Refinancing may not be worth the closing costs if you plan to move soon.
• Loan term extension: Paying less monthly but more in total interest over time.
• Break-even point: Ensure you stay long enough to recoup the cost of refinancing.

Benefits of Refinancing:

• Lower monthly payments
• Reduce interest rates
• Shorten loan term
• Get cash back
• Eliminate private mortgage insurance

Using Our Calculator:

• Enter today's mortgage rate to estimate your new loan payment.
• Your actual rate will depend on your credit profile. Improved credit may qualify you for a lower rate. Our loan officers can help you determine whether you should refinance.

When Should I Refinance My Home?

Can I Refinance Again?

• Yes, there's no limit to how many times you can refinance.

Is It in Your Best Interest?

• Consider factors like current interest rates, your financial goals, and how long you plan to stay in your home.

Key Factors to Consider:

• Interest rates
• Financial goals
• Length of stay in your home

Why Refinance Now?

• Low interest rates: Save thousands over the life of your loan.
• Significant savings: Even a 1% change in rates can impact your monthly payment.
• Switch to a fixed rate: Trade an adjustable rate for a secure, lower fixed rate.

Need Cash?

• Refinancing can lower your monthly payment or provide cash.
• Use funds to consolidate debt, pay off a second mortgage, make home improvements, or save for retirement or college.

Long-Term vs. Short-Term Financial Planning

Key Questions:

• Do you prefer long-term savings with higher monthly payments?
• Need a lower monthly payment now?
• How soon do you want to be debt-free?

Mortgage Options:

• 30-Year Mortgage: Higher interest, lower monthly payments.
• 15-Year Mortgage: Higher monthly payments, faster payoff, potential interest savings.

Choose based on your income, budget, and financial goals.

Is It Time to Say Goodbye to Your PMI?

What is PMI?

• Private Mortgage Insurance (PMI) is required if your down payment was less than 20%.
• Costs range from 0.3% to 1.5% of the original loan amount annually.
• Lenders remove PMI at 22% equity.

Eliminate PMI by Refinancing:

• If your home value has increased, refinancing can help you eliminate PMI.

Other Refinance Considerations:

• Waiting Period: Most lenders require a 6-month wait after a cash-out refinance.
• Eligibility & Credit Score: These factors affect your ability to get a loan.
• Equity: Ensure you have enough equity to justify refinancing.
• Loan Requirements: Meet all necessary conditions.
• Closing Costs: Consider if they outweigh potential savings.
• Prepayment Penalties: Check for penalties on your existing loan.
• Points & Fees: Understand any additional costs on your new loan.
• Impound Account: Determine if you need funds for this.

Each situation is unique, so consider these factors carefully.

How Could Refinancing Lower My Payment?

Lower Interest Rate:

• Lock in a lower rate to reduce your monthly payment.

Eliminate PMI:

• If you've built 20% equity, you can stop paying PMI, lowering your monthly payment.

Extend Loan Term:

• Refinance to a longer term to decrease your monthly payment.

Switch from ARM to Fixed-Rate:

• Convert from an Adjustable-Rate Mortgage (ARM) to a fixed-rate mortgage for stable, long-term budgeting.
• ARMs offer lower initial rates but can change over time.
• Fixed-rate mortgages provide consistent rates, ideal for long-term homeowners.

Can I Get Cash Out of My Home?

How It Works:

• If you have equity in your home, you can refinance your mortgage and receive cash back.
• Example: Home worth $250,000, owe $150,000. Equity = $100,000. Refinance to pay off the mortgage and get the cash difference.

Popular Reasons for Cash-Out:

• Pay off credit card debt
• Cover college tuition
• Renovate your home

Waiting Period:

• Conventional, Jumbo, VA loan, FHA loans: 1-year waiting period

Things to Consider Before Refinancing Your Mortgage

Credit Score:

• Just like your initial home purchase, consider your credit score before refinancing.

Outstanding Debt:

• Lenders will examine your debt-to-income ratio (DTI). Lower DTI increases your qualification chances. You can also use home equity to consolidate debt.

Closing Costs:

• Closing costs for refinancing are typically lower than your initial purchase but still significant. Discuss options with a New American Funding Loan Consultant.

Mortgage Prepayment Penalties:

• Check for prepayment penalties in your loan terms. These penalties can apply if you pay off your mortgage early, either through refinancing or selling your home.
• Soft Penalties: Apply only if you refinance before the set period.
• Hard Penalties: Apply regardless of whether you refinance or sell before the set period.

Call today to see if refinancing is right for you. Our experienced loan officers can answer your questions before refinancing and help you get started.