Refinancing Calculator Helps You Make A Decision

2007-03-08 10:33:40

( Financial )



If you own a house and you have accumulated enough equity, you can free up the equity by refinancing. Refinancing your home to pay off high credit card rates can be attractive when interest rates are low.

A refinancing calculator will help you decide whether it makes sense for you to access your equity. Most mortgage lenders have web sites that feature online refinancing calculator.

Using an online refinancing calculator is easy. You will need to provide some mortgage and refinancing information. Your loan balance, interest rate of the loan, and principal and interest payment of your existing mortgage loan have to be entered in the fields of this refinancing calculator.

The refinancing calculator will also ask you to give the current estimated value of your property, term of refinancing loan, the estimated amount of the new loan and its interest rate.

After you have provided all the information, the refinancing calculator will yield the result of the estimated costs to obtain a new mortgage, refinance payment, your potential savings and the number of months when you reach a break even period (the period when you have to stay in your home to recoup the cost of refinancing).

A refinancing calculator is only a tool which basically gives you an idea on the factors that affect refinancing. You may contact your original lender to check on the net savings you will get if you refinance. Then you may proceed to call other lenders to comparison shop.

Refinancing may give you significant savings on interests. But remember that there are costs involved in refinancing. It would be wise to pay the closing costs in cash. Be aware that if you add the costs to the loan (rather than paying them in cash), you will have to pay interest on the costs at the mortgage rate.


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