With 4% mortgage rates, is a refinance worth it?
September 30th, 2011 at 1:10 pm | Type:
Author: admin | Comments Off
With historically low interest rates in the mortgage market, I wanted to illustrate how much $$ refinance an existing loan will save you.
This Table breaks down how much you will actually save by doing a refinance with today’s absurdly low interest rates. I used the average APR rates on google.com with a credit score of 700-900. It’s possible to break even and start saving $ on a refinance after only 14 months! I used a $350,000 loan for my example and gave a 30 year fixed and 5 year ARM refinance option.
Your current home loan:
| Original loan amount |
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Interest rate |
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| Loan type | 30 Year Fixed | Approximate date of your first payment |
Refinance options
| Your current home loan | Refinance option 1 | Refinance option 2 | ||||||||||||||
| Remaining loan amount | $346,801 | $346,801 | $346,801 | |||||||||||||
| Loan type | 30-year fixed | |||||||||||||||
| Interest rate | 6% |
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| Closing costs |
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| Monthly payment | $2,098 | $1,656 | $1,577 | |||||||||||||
| Time to break even | 1 year and 2 months | 9 months | ||||||||||||||
| Interest to be paid |
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Filed under : Real Estate Blog