# Home Refinance Calculator

## What is a Home Refinance Calculator?

Refinancing on your loan is a great opportunity to better position yourself financially by switching to a loan with better rates and terms. Using a refinance calculator is a great place to get started when determining how much or if you can save. The Home Loan Expert is here to help explain the inputs needed to calculate your potential savings with a mortgage refinance to see if it is the right option for you.

What Inputs are Needed to Calculate Refinance?

Provide the information for the entry fields below to get an estimate of how much you can save on your monthly payments by refinancing into better rates and terms:

• Current monthly payment. This is the amount you pay each month on your loan including principal, interest, taxes, and insurance (PITI). It also includes the other fees rolled into your original loan amount.
• Current loan interest rate. Enter the interest rate you pay on your current loan. This will be compared to your new interest rate to show how much you can potentially save in interest.
• Balance left on mortgage. Enter the outstanding balance on your loan.
• New interest rate. Many homeowners refinance into a new loan to lock in a lower interest rate. Depending on the loan type you choose, this new rate will be available as a fixed rate that remains constant throughout the life of your loan or a variable rate that fluctuates in alignment with market trends.
• Remaining loan term. Enter the amount of time remaining on your original loan. This input matters because it helps establish a break-even point on your loan refinance.
• New loan term. This is the new negotiated period over which you will repay your loan. Note that shorter loan terms (10-15 years) require more aggressive monthly payments,  but will shorten the life of your loan saving you thousands of dollars in interest. Longer loan terms (20-30 years) will provide you with more manageable monthly payments.
• Discount points. One discount point is equal to one-thousandth of your loan amount. On a \$350,000 loan, one discount point would equal \$3,500. Discount points can be purchased to reduce your interest even further. For each discount point, your interest will decrease by .25%.

What is the Refinancing Process Like?

Refinancing is essentially like getting a new loan. That means you’ll have to undergo many of the same processes as you did when applying for your first or original loan. The approval process includes a thorough check of your credit, income, employment history, and finances. A home appraisal is conducted to assess the current market value of your home to indicate how much built-in equity you have accumulated.

Will Refinancing my Loan Put me in a Better Position Financially?

After using a refinance calculator, you may be asking yourself—should I refinance? Here are some of the reasons to refinance your mortgage:

• Take cash out. Leverage your home’s built-in equity with a cash-out refinance. With a cash-out refinance, you will receive cash in hand to use at your disposal.
• Open a line of credit. Similarly, tap into your home’s built-in equity to be your own personal lender. You can open a line of credit or a home equity line of credit (HELOC) to consolidate your debts, do home renovations, invest in a new business, pay off student loans or tuition, and more. Opening a line of credit can be done as a one-time, lump-sum payment that you pay a fixed interest rate on. HELOCs, on the other hand, can be broken down into the draw period and repayment period. HELOCs come with a variable interest rate that changes in alignment with market conditions.
• Say goodbye to PMI. Many homeowners no longer deposit a 20% down payment when purchasing a home. This usually requires the borrower to invest in private mortgage insurance (PMI) to offset the higher risk associated with issuing the loan. PMI can add another 0.5% to 1% on your loan. Once that 20% benchmark has been reached, it’s time to consider saying bye-bye to PMI with a loan refinance.
• Switch into a fixed-rate mortgage. 30-year, fixed-rate mortgages are still the bread and butter of the mortgage industry. Some homeowners choose an adjustable-rate mortgage (ARM) because attractive interest rates are offered during the negotiated initial period. Once that initial period ends, your loan switches to a variable interest that fluctuates with market trends. This can cause your monthly payments to increase significantly, which is why switching to a fixed-rate loan could financially be a good idea.

How Can The Home Loan Expert Help?

Over a decade ago, The Home Loan Expert began its journey, knocking door-to-door, asking community members if they were aware of loan refinance opportunities they could take advantage of to position themselves better financially. Even as we’ve grown, we’ve never lost sight of our original mission to get homeowners the best deal possible on a loan.

A refinance calculator is a great tool when estimating how much savings potential a loan with new rates and terms has in store for you. Our knowledgeable team of friendly lending Experts can help you pinpoint that dollar amount with more accuracy, answering whatever questions you may have along the way.

Our lending representatives are carefully selected from the same communities we serve. Because of this, we’re familiar with our clients’ needs and able to help them meet their monthly budgeting goals. And, thanks to our efficient in-house writing process, we can get you into your dream home in as little as two weeks. So give us a call today at 866-221-1926 to speak with one of our knowledgeable lending experts, whose mission is to get you the best deal possible on your loan. We can also be reached through our online chat service to find out how you can refinance into better rates and terms on your monthly payments today.

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