Using Mortgage Refinance Calculators

Using a mortgage refinance calculators is one of the first steps to determining if a refi makes sense or not. These calculators can help you determine the break-even point (BEP), beyond which your savings begin to exceed your costs. And that’s what we are going to discuss in this lesson.

Let’s start off by revisiting the all-important rule of refinancing success. If the money you pay to refinance your mortgage (the closing costs associated with it) exceeds the money you save over the term of the new loan, then it doesn’t make any sense to refinance the loan. This is where calculators come into the picture.

How to Use a Refi Calculator

A mortgage refinance calculator can help you run the numbers to see where you’ll come out after the refi. More specifically, it will help you compare your current mortgage payments to your new payments after refinancing the loan. You can then compare your savings to what you might expect to pay in closing costs, to see if the refi makes sense.

That’s why I always tell people to start the research process by using a refinance calculator to calculate the savings (or the lack thereof). The question is, where do you find the best calculators … or does such a thing even exist?

Here’s my advice to you. I wouldn’t rely on just one refinance calculator. I would bookmark two or three of them and use them all to validate one another. It’s kind of like using a scale to weight something. How do you really know if the scale is accurate? You don’t, unless you compare it against others to validate the reading. You can do the same thing with mortgage calculators, and I highly encourage you to do so. So instead of searching high and low for the best refinance calculator (and wearing yourself out in the process), just find two or three decent calculators and use them all.

Here’s a list of websites to get you started:

• www.mortgage-calc.com/mortgagerefinancing/
• www.lendingtree.com/mortgage-refinance/calculators/
• www.quickenloans.com/mortgage-calculator/refinance
• www.bankrate.com/calculators/mortgages/refinance-calculator.aspx

Even More Refinance Advice

I hope these calculators help with your refinance research. If you would like to learn more about this topic, be sure to check out the main refinancing section of our website. You can find dozens of helpful articles, tools and more. Good luck.