Be your own Mortgage Broker! That’s right, I said it. You can figure out for yourself whether a Mortgage Refinance will be a positive factual reality. Here is how to move from the confusing online calculators to a simple, do it yourself, answer.
Online Mortgage Refinance Calculators
In searching for a simple and useful Mortgage Refinance Calculator, the web seemingly provides two extremes.
A. Information Grabbing Pseudo Calculator – These websites are pleasant to the eye and seem to promise the factual answers you are looking for. The problem is that one or two questions in you notice a grab for some personal information. Can you say ‘Click’ on the red X!
B. Data Overload Calculator – These websites have too much and/or inapplicable fields. This can leave you wondering if you have arrived at the actual answer and might leave you thinking you may look dumb if you try to act on the information provided. Another ‘Click’ on the X!
DIY Simple Refinance Calculation
In cutting through the thinly disguised info grab or the data overload available out there…we can level a simple method that you can take to the bank (or better yet your friendly neighborhood Mortgage Broker).
At the end of the day, you simply need to take the cost of refinancing your mortgage and divide it into the amount you will save per month. This will let you know, based on your new mortgage term, whether this will be worthwhile or not.
Quick example: You have determined that your cost to refinance will be $4,500 (early penalty + legal cost). Your new payment at best rates will be $250 less per month than you are currently paying. (4,500 / 250 = 18). So this means you will break even at the 18 month mark of your new term. If you lock into a new five year fixed mortgage at today’s rates you will be way ahead of the game. Easy peazy…don’t need a graph.
Find out more about all of the things you need to know about your Mortgage Refinance.
Info Needed To Complete Calculation
So for our DIY Mortgage Brokers out there, you may have realized that we are missing some crucial information in order to make the above calculation.
Best Rate For New Payment – It’s hard to determine what your monthly savings will be without knowing what your interest rate will actually be. Using rate websites can be deceiving as you may not qualify for the number presented.
Working with me as your Mortgage Broker, I will quickly find you the interest rate based on all your specific factors, the mortgage rules, and any promotions that are available today.
Penalty To Break Existing Mortgage – The other missing number is what your actual cost to refinance will be so you can complete the DIY math. Your penalty can be as simple as a three month interest penalty, all the way to an Interest Rate Differential. The difference between the two can be a shockingly higher number than you may expect so please reach out to me for a complementary review of your existing mortgage contract.
Helping You Help Yourself
I have made the mistake in the past of trying to take on a project that was a little too technical for my understanding. A couple of sparks fly and all of sudden I realize that it is time to call in a professional.
The beauty of making these calculations is that they are relatively simple (once you have the appropriate data). The harder part is in getting the accurate answers in order to make the calculation. Doing this part wrong or cutting corners can lead to making a costly mistake.
My hope is that you will take this information and figure out, for yourself, the simple way to calculate if a Mortgage Refinance is right for you. And by accomplishing this, you will be looked to by your loved ones as the source to explain it to them. I am here to help by reaching out today.