Use our mortgage calculator with amortization schedule to see how much your monthly payment will be and how much interest you will pay. You can also view the detailed payment schedule that will show once you click Calculate.
If you’re looking to refinance your current mortgage, please scroll below the calculator to learn more.
Refinance your mortgage
Mortgage refinancing involves replacing your existing mortgage with a new one. This allows you to secure a potentially lower interest rate, which can significantly impact your monthly payments and overall borrowing costs. Depending on your goals, you can choose different types of refinancing:
Rate-and-term refinance: This aims to reduce your interest rate, either by locking in a lower rate in the current market or shortening your loan term to pay off the debt faster. This can lead to lower monthly payments and substantial savings over the life of the loan.
Cash-out refinance: This replaces your current mortgage with a larger one, allowing you to access your home equity as cash. This can be used for home improvements, debt consolidation, or other significant expenses. While it offers immediate access to funds, it also increases your loan amount and extends the repayment period, resulting in higher total interest paid.
Whether a refinance is right for you depends on your individual circumstances and financial goals. Carefully consider the potential benefits and drawbacks, including closing costs and impacts on your long-term financial picture, before making a decision.
Refinancing Your Home: A Step-by-Step Guide
Refinancing your mortgage can offer significant financial advantages. Here’s a breakdown of the key steps involved:
1. Set Your Goal:
Identify your primary reason for refinancing. Do you want a lower interest rate, shorten your loan term, access home equity, or eliminate mortgage insurance? Clarifying your goal will inform your loan type selection and calculations.
2. Assess Your Finances:
Check your credit score and report for any errors that could impact your interest rate. Review your current mortgage statement and calculate your loan-to-value (LTV) ratio. A higher credit score and lower LTV will qualify you for better rates.
3. Research and Compare Lenders:
Get quotes from various lenders, comparing interest rates, terms, closing costs, and lender fees. Online comparison tools can streamline this process. Consider factors like lender reputation, responsiveness, and any online reviews.
4. Choose Your Loan Type:
Select the best loan type to match your goals. Common options include rate-and-term refinance, cash-out refinance, and FHA streamline refinance. Each option has different requirements and benefits.
5. Submit Your Application:
Gather required documents like pay stubs, tax returns, and bank statements. The lender will verify your information and issue a pre-approval letter.
6. Lock Your Interest Rate:
Interest rates can fluctuate, so securing a rate lock protects you from potential increases during the closing process. Choose a lock term that aligns with your timeline for closing.
7. Appraisal and Underwriting:
An appraiser will assess your home’s value to determine your LTV. Underwriters will review your financial information and verify your eligibility for the loan.
Once approved, you’ll receive closing documents outlining the final loan terms and fees. Review them carefully before signing. At closing, you’ll pay closing costs and finalize the new loan.
9. Enjoy the Benefits:
Start making payments on your new mortgage and reap the benefits of your refinance. Lower monthly payments, debt consolidation, or access to equity can improve your financial situation.
- Consider consulting a mortgage advisor for personalized guidance throughout the process.
- Stay organized and maintain accurate records of your documents.
- Be mindful of closing costs and negotiate with lenders if possible.
- Always prioritize communication with your lender and respond promptly to any requests.
Remember, refinancing is a significant financial decision. Carefully evaluate your options and choose the best path to achieve your financial goals.