Now, your interest rate jumps from 2% to 6% (4% T-bill + 2% markup)! This jump will boost your monthly payment significantly.
After year five, let's suppose the T-bill rate is 4%. Your monthly payment will be constant for the first five years, calculated at a 2% interest rate to pay off the loan in 30 years.
Simple refinance mortgage calculator plus#
The interest rate is 2% for the first five years, and then the one-year T-bill rate plus 2% each year after. As an example, let's say you have a 5/1 ARM over a 30-year term. They'll take that index (say, the one-year Treasury bills) and add a percentage to it. After that, your interest rate will adjust based on an index.
With this loan, you will have a fixed rate for a certain length of time (say, five years). The second loan category is an ARM or adjustable-rate mortgage. The shorter the term, the lower the interest rate! These loans typically have 30, 20, 15, or 10-year durations. The only way you can adjust it is to refinance. Therefore, if your term is 30 years with a monthly cost of $1,500 per month at 3.5% APR, that payment, term length, and interest rate will never change. They have a fixed interest rate and monthly payment for the duration of the loan. Broadly, there are two types of loans, and each one has a drastic impact on your refinance rates.įixed loans are the first loan category. The minimum credit score is 580, and, while there is no specific debt-to-income maximum, anything above 41% will encounter additional scrutiny.Ĭhoose the type of loan that you want. This option has significant benefits, allowing refinancing for up to 100% of your home's value (including cash out!), as well as no mortgage insurance costs. The downside is that you must pay for private mortgage insurance - even with 20% equity - which tends to make this option more expensive.įinally, the last (and best option, if you qualify) is a VA refinance. You can refinance up to 80% of your home's value. You'll need a minimum credit score of 580 and a debt-to-income ratio of 43% maximum. With this replacement mortgage, you'll have a loan backed by the Federal Housing Administration. The bank has a set of criteria that they'll use to determine if you qualify or not, which typically means a credit score of at least 620 (although 680+ is preferable) and a debt-to-income ratio of no more than 45% when factoring in the refinanced loan. When applying for a conventional refinance mortgage, you can refinance up to 80% of your home's value. This loan type is the most common and the most straightforward. There are three possible loan types from which you can choose. Your monthly payment will increase by $18.27.Select the type of loan for which you would like to see the refinance rates.
Simple refinance mortgage calculator full#
By refinancing, the total amount of interest paid on your mortgage will increase by $341.51 over the remainder of your term and will increase by $2,521.33 over the full amortization of the mortgage.Your monthly payments would be about $1,645.93 per month, and it would take approximately 26.4 years to pay it down. Your mortgage after refinancing would have a balance of $303,410.04.After applying the refinance penalty to the mortgage balance, you would have $56,589.96 in equity left for debt consolidation purposes.For the exact amount, you must contact your current lender. We estimate that the penalty for breaking your mortgage term early would be approximately $3,410.04.Following federal lending guidelines, up to $60,000.00 of this equity could be available for use during refinancing.
You have approximately $150,000.00 of equity in your home.At the same rate, the interest you would pay from now to the end of the amortization would be $215,827.13. It would cost $30,016.26 in interest over the 26 months remaining in your term. Your current mortgage would be paid in full in approximately 26.4 years.
0 kommentar(er)
