Refinance Calculators Help Determine if Refinancing is Your Best Choice

By Geoff Walker
Calculators for Mortgages Columnist

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A mortgage refinance and refinancing calculator can help you assess the benefits of replacing your existing mortgage with a new home loan. There are a number of good reasons why you might want to do this.Mortgage loans and home loans need to be reviewed periodically. Interest rates go up and down, and you may be able to save yourself a pile of money by finding a mortgage company that can offer you a 'cheaper' home loan. As well as checking out more economical home loans, there are other reasons for considering mortgage refinance, such as:

• Paying off your mortgage loan earlier
• Putting all your debts in one basket (consolidating) and enjoying a lower interest rate and one convenient monthly payment
• Releasing some of the value (equity) that has built up while your home has risen in value and your mortgage loan balance has reduced. This gives you a cash sum for a new car, college fees, and many other uses.
• Moving from an adjustable rate mortgage to a fixed rate

The refinance calculator crunches the numbers for you and instantly shows you the effect of various refinancing home loan options.

Mortgage Refinance and Refinancing Calculator: Making it Work

You need to feed the refinance calculator some basic information. Input the following:

• What you currently owe on your home loan (mortgage companies can provide you with this information)
• Your present monthly repayment
• Your current interest rate
• The interest rate on your refinancing loan
• Your closing costs (for example, mortgage and legal fees, and appraisal costs)

The refinance calculator will automatically show the effect on your payments, highlight any savings, and give you a clear overview of the effect of your mortgage refinancing.



About the Author
A freelance writer with degrees in arts and commerce, Geoff Walker has experience in corporate financial management, mortgages, and fund-raising.