The first is that you should only consider refinancing if the new interest rate is at least 1 point lower than your current interest rate. Tip: Only consider refinancing if the new interest rate is at least 1 point lower than your current interest rate. Whether you should refinance will ultimately depend on your personal situation - people refinance loans for a number of reasons, including a longer or shorter term or a lower interest rate - but there are a few rules you can use to help you decide. The answer to when you should refinance your mortgage is a tricky one - there is no catch-all answer. These two figures should help you decide whether the refinance makes fiscal sense for your needs. It will also give you an idea of how much your monthly payments will decrease with the refinance. Once you have that information on hand, all you have to do is plug it into the calculator and the calculator will give you an idea of how much you’ll save on interest with the new loan over the life of the loan. If you don’t know the exact amount, an estimate of 2%-6% of your refinance loan amount will give you an idea. These impact your overall monthly and total interest savings. Try to come up with a rough estimate of what your closing costs will be for the refinance, too - having that number will give you a better idea of whether your refinance makes sense when you plug in the numbers. You’ll also want to have an idea of your new interest rate for the refinance, though you can plug in different rates to see what your savings would be if you’re just starting to shop around for refinance rates. To use a mortgage refinance calculator, you’ll need to know a few general pieces of information about your property and loan, including the amount of your original mortgage, your original term, current interest rate, and origination year. While the term is “mortgage calculator,” you can actually use this type of calculator to assist in a number of mortgage-related decisions, including whether a mortgage refinance would be right for you. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues. All examples are hypothetical and are for illustrative purposes. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. Next steps: Find the best rate that works for you Check Rates
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