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Should I Refinance My Mortgage?

Is your current interest rate on your house too high? Use this free tool to view today's best home loan refi rates from top lenders & estimate your savings at a lower APR (Annual Percentage Rate).

The 2017 Tax Cuts and Jobs Act increased the standard deduction for individuals or married filing individually to $12,000, head of household to $18,000 & married filing jointly to $24,000. Previously around 47 million Americans itemized deductions. According to the nonpartisan Tax Policy Center the number of Americans who itemize deductions is expected to drop to around 19 million. If you are unlikely to itemize your deductions, you can set your state & federal tax rates at zero in our refinancing calculator to remove the impact of taxes on the calculator's output.

Input Information
  Before Refinancing After Refinancing
Original Price of Home : ($)
Original Loan Amount : ($)
Interest Rate : See Today's Best Rates (%) (%)
Loan Term : (Yrs) (Yrs)
Months Already Paid : (Mts)
Years Before Sell : (Yrs)
Fees and Points
Discount Points : (%)
Origination Fees : (%)
Other Closing Costs : ($)
Your Taxes Rates
Federal Income Tax Rate : (%)
State Tax Rate : (%)
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Refinance Into a 15-yr Loan & Lock-in Low Rates Today

How much money could you save? Compare lenders serving Ashburn to find the best loan to fit your needs & lock in low rates today!

By default 15-yr fixed-rate refinance loans are displayed in the table below. Filters enable you to change the loan amount, duration, or loan type.

 

Factors to Consider When Refinancing

When you buy your home, it may not always be under the perfect circumstances. Your credit may not have been good enough to qualify you for the best interest rates. You may not have had the down payment you wanted. You may taken on more than you could really afford in your enthusiasm to own your first home.

Refinancing can be the answer for many homeowners trying to balance their budget and meet their financial goals. In some cases, it can save you hundreds of dollars a month. However, it is not always the most appropriate solution. It's important to understand the pros and cons to ensure that you make the right decision for your personal circumstances.

Signs It's Time to Refinance

Piggy Bank.One of the best signs that it's a good time is that interest rates have dropped or that you now qualify for lower interest rates based on your improved credit score or credit history. A two-point interest rate deduction on a $100,000 home alone could save you tens of thousands of Dollars over the life of a 30-year, fixed-rate loan. Typically, a full point or two is necessary to make refinancing worth your while. The savings from a half-point or less may take years to offset expenses, depending on the terms of your loan.

Another good reason to refi is if you want to get out of an adjustable-rate mortgage or to eliminate a second mortgage loan, or a piggyback loan. When your ARM is going to reset to a higher interest rate, you may be able to shift into a fixed-rate loan with a lower interest rate. Of course, your credit history will need to have improved significantly from when you were approved for the original loan. You can also refi to consolidate two loans into one single loan with one monthly payment.

A less-popular option is the “cash out” refinance, which can be used to help pay down other higher interest debts. The cash out option involves taking out a loan for more than the original loan amount — assuming you have built up some home equity — and taking out the difference from the amount you still owe on your mortgage in cash. You can use that money to pay down debts, though you might have to pay a higher interest rate.

An often overlooked reason to refi is to pay off your home more quickly, perhaps in preparation for retirement. Instead of paying off your mortgage for another 25 years, you can pay it off in 15. Though you may have to pay more per month, you may end up spending far less over the years as a result of a lower interest rate.

Signs It's Best to Wait

Refinancing won't always save you money. It typically involves the same closing costs as your original loan, including attorney fees, appraisals and title insurance — though some fees may be waved as banks compete for your business. To determine if it is the best choice, you should compare your monthly savings to the costs you will have to put in and find out how long it will take you to break even. If you don't plan to live in your house that long — and preferably longer, refinancing isn't worth it. You may also face additional costs if your original loan has an early prepayment penalty.

The above calculator can help you quickly break down your costs and benefits to better understand if refinancing is the right choice for you. The calculator takes into account your interest rate, length of the loan, the amount of time you plan to stay in your home, origination and closing costs and taxes so you can get a complete financial analysis.