- Original mortgage amount: Original amount of your
mortgage.
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- Appraised value: The appraised value of your home
when you purchased it.
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- Current term in years: Total length of your current
mortgage in years.
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- Years remaining: Number of years remaining on your
current mortgage.
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- Income tax rate: Your current income tax rate.
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- Calculate balance: To let the calculator determine
your remaining balance, based on your original loan information and years remaining, check
this box. To enter your own amount, leave this box unchecked.
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- Current Appraised value: The current appraised value
of your home.
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- Loan balance: Balance of your mortgage that will be
refinanced.
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- New interest rate: The annual interest rate for the
new loan.
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- New term in years: Number of years for your new
loan.
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- Loan origination rate: This is the percentage of the
new mortgage that is paid to the lender as the loan origination fee. Typically this fee is
1% of the loan balance.
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- Other closing costs: Estimate of all other closing
costs for this loan. This should include filing fees, appraiser fees and any other misc.
fees paid.
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- Points paid: This is the number of points paid to
the lender to reduce the interest rate on the mortgage. Each point costs 1% of the new
loan amount.
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- Current payment: Your current payment is the sum of
principal, interest and PMI. Because refinancing does not affect your insurance or taxes
they are not included here.
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- New payment: Your new payment is the sum of
principal, interest and PMI.
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- Monthly PMI payment: Monthly cost of Principal
Mortgage insurance (PMI). For loans secured with less than 20% down, PMI is estimated at
0.5% of your loan balance each year. Monthly PMI is calculated by multiplying your
starting loan balance by this percent and dividing by 12. When your loan balance exceeds
20% of the original purchase price, your PMI payment drops to zero.
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- Monthly PI payment: Monthly principal and interest
payment.
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- Breakeven monthly payment savings: The number of
months it will take for your monthly payment reduction to be greater then your closing
costs.
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- Breakeven PMI & interest savings: The number of
months it will take for your interest and PMI savings to exceed your and closing costs.
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- Breakeven total savings after tax: The number of
months it will take for your after tax interest and PMI savings to exceed your closing
costs.
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- Breakeven total savings vs. prepayment: This is the
most conservative breakeven measure. It is the number of months it will take for your
after tax interest and PMI savings to exceed both your closing costs and any interest
savings from prepaying your mortgage. The prepayment amount used in this calculation is
the amount that you would have to spend on closing costs.
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