Refinancing your mortgage: Estimating potential benefits

Refinancing isn't necessarily limited to lowering mortgage rates. Depending on how much home equity you have and your financial needs, it may be possible to refinance for enough to consolidate credit card debt or make home improvements. Today's low mortgage rates may increase the amount you can borrow as lower rates make borrowing more affordable. Here are some tips for determining if a refinance mortgage is feasible.

Mortgage calculators: Estimating potential savings, benefits

Using mortgage calculators is helpful for estimating savings and identifying potential benefits of refinancing your mortgage. The mortgage comparison calculator provides an estimate of how refinancing to a lower mortgage rate can save on interest and lower your mortgage payment.

• Factoring in closing costs: Although you can save by refinancing to a lower mortgage rate, you'll want to estimate and deduct closing costs from the interest savings indicated by the mortgage comparison calculator. Review your mortgage quotes for estimated closing costs and deduct these amounts from interest savings.
• Evaluate mortgage quotes using a refinance calculator: You can compare mortgage quotes against your existing mortgage using a refinance calculator. This helps with determining how or if refinancing is appropriate to your needs.
• Other ways to save: If you don't need extra cash, and can afford a higher monthly payment, refinancing from a 30 year fixed rate mortgage to a 15 year mortgage can help with paying off your mortgage faster, and you can also save on mortgage interest paid over time. Again, you'll need to deduct the cost of refinancing, but depending on how long your remaining repayment term is for your existing mortgage, refinancing to a 15 year mortgage at today's low rates can potentially save thousands in mortgage interest paid.

You can also use a closing costs calculator for estimating closing costs based on information you enter into the calculator. Closing costs typically vary, so keep in mind that it's not possible to make precise estimates of final closing costs. Using mortgage calculators and tracking your results is effective for identifying questions about mortgage loans you're considering, and for negotiating with mortgage lenders.