I’m a mortgage loan officer and I use it frequently.
THANK YOU FOR YOUR WORK – WELL DONE! Reply If the difference in the payments is invested, you will have an estimated gain of $121,883 from the additional investment income.īottom line? Your total net SAVINGS will be $133,265. Now, since the payments are LESS under the proposed refinancing than it is under the current financing, you could invest this difference. However, the interest savings will increase your taxes by $0 due to the lost deduction. So considering just the differences between the two loans: after tax considerations, and other related closing costs you will SAVE $11,382 (NOT A BIG DEAL, BUT POSSIBLE CLARIFICATION …IF YOU TAKE POSSIBLE REFINANCE LOAN). The cost for the possible financing includes $3,800 in miscellaneous closing costs. The possible refinancing will cost you $119,072 (reduced by a $37,962 tax benefit). Your current financing will cost you $130,454 (reduced by a $42,960 tax benefit). The amounts used in this analysis are discounted to today’s dollars (adjusted for inflation). I have made some notes in all caps for your considerationīy the time you sell after 26 years (LITTLE CONFUSED SINCE I USED 30 YEARS AS SALES DATE, IT APPARENTLY STOPPED COUNTING AT END OF MY LOAN PERIOD), you’ll have paid down $373,348 under your current loan, or $386,999 under the possible refinancing. Well done, thank you for making a complicated subject easier. Even though the prepayment penalty is associated with the current loan, it's a cost you have to pay to obtain the new financing. Prepayment Penalty for Current Loan - If the CURRENT loan has a prepayment clause that requires you to pay a fee if you pay the loan off early, enter the fee here.Miscellaneous Closing Costs - Some loans, typically mortgages, have additional fees and closing costs.mortgage, the lender may require that you pay "point" to receive the lowest possible interest rate. Loan Origination Points - If the new loan is a U.S.Expected Payment Frequency - The payment frequency for the potential loan.After you review the "Results," you may click back to the financing tabs, and you'll be able to see the payment amount the calculator used if you had the calculator calculate the amount. If you prefer entering a payment amount, you may do so by checking the option. New Payment Amount - If you uncheck the checkbox, the calculator will calculate the new payment amount.Anticipated Annual Interest Rate - New interest rate.Number of Payments Due - The term for the new loan.This amount can be different than the current loan balance. New Loan Amount - New projected loan amount.Possible Lender (optional) - Name of the potential new lender for a printed report.Our Cash Out Refinance Calculator shows you the minimum property value required to qualify for the refinance. If the value of your property has declined or you have a significant mortgage balance you may not have sufficient equity to do a cash out refinance. Before you apply for a cash out refinance make sure that your property is valued high enough to support the mortgage amount you are seeking. Most lenders apply a maximum loan-value (LTV) ratio of 80% for a cash out refinance and some lenders apply a lower LTV ratio of 60% - 70% for larger mortgage amounts (jumbo loans) or if you are taking a significant amount of money out of your home. For example, if your property value is $100,000 and your mortgage balance is $70,000 then you have $30,000 in home equity: $100,000 (property value) - $70,000 (mortgage balance) = $30,000 (home equity). Equity is the difference between the value of your property and the amount of debt on a property. You must have enough equity in your property to take cash out of it. Make Sure You Have Sufficient Equity in Your Property