refinance

Should you refinance your home?

Deciding whether or not to refinance home mortgages has many homeowners scratching their heads. If you are among this bevy of confused and frustrated borrowers, you may benefit from using a mortgage refinance break-even calculator to help determine if a refi makes sense.

There are several factors to consider before refinancing your home, including your current and prospective interest rates and your anticipated closing costs. But perhaps the chief factor you should consider before revisiting the closing table is the length of time you plan to continue living in your home.

Selling your home shortly after a refi is not typically recommended because you probably won't save enough in interest to offset your closing costs. So before determining whether or not to refinance home mortgages, borrowers should decide how long they plan to reside in their home and determine their break-even point. A break-even point is the point at which your savings outweigh your refinancing costs.

Confused about how to determine your break-even point? Not to worry. A mortgage refinance break-even calculator, like the one found on Bankrate.com, can help you determine your break-even point both quickly and efficiently. Simply plug in various factors and let this handy tool run the numbers for you.

To utilize a mortgage refinance break-even calculator, you will need information such as:

  • Amount of original mortgage.
  • Appraised value of home at purchase.
  • Current mortgage term in years.
  • Years remaining on current mortgage.
  • Current income tax rate.
  • Current appraised value of home.
  • Current balance of loan.
  • Interest rate for new loan.
  • New mortgage term in years.
  • Loan origination rate (typically 1 percent of loan balance).
  • Closing costs.
  • Points.

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