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A Helpful Mortgage Refinance Calculator

by Jason on May 17, 2010

Should I Refinance My Mortgage?

That’s the question we want to answer today.

Mortgage rates are still very, very low.  Who would’ve ever thought we’d see mortgage rates this low for this period of time.

I remember thinking back in August when we first started building our house and mortgage rates were at their lows that we’d never see those rates by the time we got our home mortgage loan.

But to my surprise we ended up getting a 4.875% rate even with a 60-day lock!  I was ecstatic!

Mortgage rates are still very competitive and so if you haven’t taken advantage of a mortgage refinance, you may want to seriously consider it soon – before mortgage rates start going back up again!

But, is refinancing your mortgage a smart thing to do?  What is you don’t plan to stay in your current house forever?  Should you still refinance?

These are good questions to ask!

Thankfully there are handy mortgage refinance calculators that can help us make decisions like this.

Here are some things to consider when refinancing your mortgage, and then I’ve attached a mortgage refinance calculator that I found on mortgageloan.com.

Additionally, it’s a good idea to check your credit report and score, so you know ahead of time what sort of rate you might be eligible for.

What is Your Current Mortgage Rate and What New Rate Could You Get?

What is your existing rate on your mortgage?  Where are rates at now in the open market?

Here’s where rates are at today:


Current National Rates

Mortgage Rates © ML

Or, to get an idea of mortgage rates in your state, check out GoBankingRates.com, which allows you to choose your state and the mortgage amount and compare rates in your area.

If you can drop your rate by at least a percent or more, you’ll want to seriously consider a refinance.

How Long Do You Plan to Stay in the House You are Refinancing?

Are you only planning on staying in your existing home for another year or two?  Maybe you’ll want to hold off on the refinance!

If you plan to stay a little longer, then the closing costs may not be as bad as you look at your break-even point.

Have a good idea of your time frame so you can make a more educated decision on whether the costs of refinancing your mortgage will be worth it.

What Type of Mortgage Loan Do You Have Currently?

Do you have a 5-year Adjustable Rate Mortgage (ARM) that’s about to expire?  You may want to refinance very soon and get a fixed-interest loan!

Do you have a 30 year mortgage and you’d like to get that down to a 15 year mortgage?

The difference in rates may allow you to do that without adding much more to your payment.

What Is Your Home’s Value and Can You Get Rid of PMI?

With the real estate crash that we’ve seen the last couple years, it doesn’t always make sense to refinance.  Decreasing home values have made it difficult to really make sense of the numbers in many cases.

But, you’ll want to know what your home’s value is and if you can get rid of PMI if you are still paying it.

PMI is private mortgage insurance that lenders typically charge if your loan-to-value ratio is not quite 80%.  If you have paid off a chunk of your mortgage and think your loan-to-value is at least 80% then you may want to refinance so you can get rid of that pesky PMI!

Mortgage Refinance Calculator

Check out one of these handy Mortgage Calculators and determine if a mortgage refinance is right for your situation!

Should I Refinance?

Refinance Calculator © ML

You might also be interested in this Credit Card Payoff Calculator!

What Are Your Thoughts?

Readers, have you refinanced your mortgage recently?

How did the process go?

What tips would you offer other readers to help them through the mortgage refinancing process?

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