Refinance Calculator
A refinance calculator can help you determine how much money you could potentially save by refinancing your mortgage, as well as whether the cost of refinancing is worth the potential savings. All you need to do is enter info about your current mortgage loan and the new loan you are considering.
What is a refinance?
A mortgage refinance refers to the process of replacing an existing mortgage with a new one. Here are the key points about mortgage refinancing:
- Mortgage refinance involves obtaining a new loan to pay off the existing mortgage.
- It is typically done to take advantage of lower interest rates, which can lead to reduced monthly payments and potential long-term savings.
- Refinancing allows borrowers to change the terms of their mortgage, such as the loan term (e.g., from 30 years to 15 years) or the type of interest rate (e.g., from adjustable-rate to fixed-rate).
- It can help borrowers consolidate debt by using the equity in their home to pay off high-interest loans or credit card debt.
- Mortgage refinancing may involve closing costs, including appraisal fees, application fees, and title insurance, which should be considered when evaluating the overall financial benefits.
- It is important to assess the break-even point, which is the time it takes for the savings from refinancing to offset the costs of the new loan.
- Refinancing may require meeting certain eligibility criteria, such as a good credit score, sufficient income, and equity in the home.
- Mortgage refinancing can be a strategic financial move that helps homeowners achieve their goals, such as lowering their monthly payments, paying off their mortgage sooner, or accessing cash for other purposes.
- It is recommended to carefully evaluate the potential benefits and costs of refinancing and consult with mortgage experts to make an informed decision.
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Who can get a Refinance?
Mortgage refinancing is available to homeowners who meet certain eligibility criteria. While specific requirements may vary based on the lender and loan program, some general factors that determine who can get a mortgage refinance are identified below.
Homeownership. Only individuals who own a property with an existing mortgage can consider refinancing a mortgage.
Creditworthiness. Lenders typically assess the borrower's credit history and credit score to determine their creditworthiness. A good credit score increases the chances of qualifying for a refinance and securing better terms.
Equity. Homeowners should have built up equity in their property, ideally at least 20% or more. The equity serves as collateral and helps lenders mitigate the risk associated with refinancing.
Income and Employment Stability. Borrowers must demonstrate sufficient income to afford the new mortgage payments. Lenders assess employment history, income stability, and the debt-to-income ratio to evaluate the borrower's ability to repay the refinanced loan.
Loan-to-value (LTV) Ratio. Lenders consider the loan-to-value ratio, which compares the loan amount to the appraised value of the property. Generally, a lower LTV ratio increases the chances of qualifying for a refinance.
Debt and Payment History. Lenders review the borrower's overall debt load, including existing loans and credit card debt, as well as their payment history. A solid payment record and manageable debt levels can enhance eligibility.
Documentation. Borrowers need to provide necessary documentation, such as income verification (pay stubs, tax returns), bank statements, and other financial records, to support their refinance application.
Are you ready to explore a home loan refinance? UHM's mortgage experts can help you throughout the refinance process and potentially lower your monthly mortgage payments. Contact us today to learn more about refinance eligibility criteria, refinance rates and terms.
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It's important to remember that the results of the mortgage calculators are only
estimates and should not be considered as a guarantee of the values displayed.
Once you have explored your options, we can turn your dreams of
homeownership into reality. Get started now.
