Deciding to refinance your home might be a wise financial move. If rates have fallen since you bought or took out a second mortgage, refinancing can lower your monthly payments or trim the length of your mortgage.
Sometimes, though, a refi simply doesn’t make financial sense. For instance, closing costs might make refinancing unattractive if you plan to sell your home in just a few years.
So how can you know for sure that your decision to refinance is the right one? A mortgage refinance calculator can help you to consider all of the variables involved in the refinancing process.
A mortgage refinance calculator uses a number of factors to help you determine whether a refi is in your best interest. Bankrate.com’s mortgage refinance calculator will ask for the following information:
- Current monthly payment.
- Current interest rate.
- Balance remaining on mortgage.
- New interest rate.
- Years remaining on current loan.
- Years of new loan term.
It also takes into account certain fees that many borrowers often do not consider, such as costs for:
- Bank fees.
- Credit check.
- Attorney fees.
- Title search.
- Title insurance.
- Local taxes and transfers.
- Document preparation.
After you plug all of your information into the calculator, it will compute the total cost of refinancing your home and determine your new monthly payment. You can then compare the figures to see if a refi would make sense in your situation.