Home Equity Calculators

Mortgage calculators for refinancing can help tell the story, in dollars and cents, of why, or why not, a property owner should refinance their current mortgage.

Here are examples of the calculations possible with mortgage refinance calculators:

Calculating the Annual Percentage Rate for an existing ARM mortgage is one such usage. The mortgage calculator figures an estimated APR for different scenarios based on the parameters provided by the user. The loan fees that are typically included in this calculation are appraisal fees, charges for credit reports, preparation of documents and underwriting. Also included are loan processing costs, wire transfer fees, tax-related charges and flood certifications. The mortgage calculator takes all this input and helps to ensure that prospective purchasers are “comparing apples with apples” to come up with good estimates for assessing their various loan options.

Calculate how much your total monthly payment, i.e., principal, interest and escrow, will be for a new loan amount. The mortgage calculator takes into account all relevant costs in order to figure total monthly outlay for the given loan amount and circumstance. For condominium purchasers, some mortgage calculators will also include monthly condominium association assessments in order to determine total monthly housing costs for the purchaser.

Analyze whether to pay points in order to obtain a lower interest rate mortgage loan. In essence, points are a premium paid to a lender for the privilege of borrowing at a given interest rate. One point is equal to one percent of the total loan amount. Negotiated up front in the lending process, points are paid at closing. The mortgage calculator quantifies mortgage savings as a result of the purchase of points and, most important for comparison, how long it will take a borrower to recover the money spent on points.

Calculate the benefit of paying a mortgage bi-weekly rather than monthly. By quantifying how much money you will save by paying your mortgage twice monthly, one-half of monthly payment paid every two weeks, you will be able to determine the savings in interest resulting from this payment plan.

Determine whether it is worth it to pay a little extra each month toward a mortgage in order to pay it off early. The mortgage calculator figures out how much you can shorten the length of your loan and how much interest you will save by paying a certain amount extra each month on your principal.

Determine what your principal and interest will be after a specified number of payments. Particularly useful when comparing ARMs, this feature calculates your principal and interest after a certain number of payments (input by the user).

In summary, mortgage calculators for refinancing help to distill often confusing facts about various loan options down to certain key calculations that can then be easily used by the average homeowner to compare apples with apples and make informed choices as to the financing goals.