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Is refinancing for you?
Every input and output the calculator uses, explained in plain terms.
Today's mortgage rates may create opportunities to lower your payment*, shorten your loan term, or tap into your home's equity. See what refinancing could mean for your financial future.
A mortgage refinance replaces your existing home loan with a new loan, typically to secure a lower interest rate, change the term, switch from ARM to fixed, or take cash out of your equity. The new loan pays off the old loan at closing, and you begin making payments on the new one.
Refinancing may make sense if it could help you lower your monthly payment, change your loan term, access home equity, or better align your mortgage with your financial goals. The right time to refinance depends on your individual situation, current loan, and available loan options.
The break-even point is the number of months it takes for your monthly savings to add up to the closing costs you paid, calculated as closing costs ÷ monthly savings.
Refinance closing costs typically run 2%–6% of the new loan amount, including lender fees (origination, underwriting, application), third-party fees (appraisal, title, credit report, recording), and prepaids (escrow reserves, per-diem interest).
Refinancing to a shorter loan term may help you pay off your mortgage sooner and reduce the amount of interest paid over the life of the loan. However, it can also increase your monthly payment, so it’s important to consider your budget and financial goals.
A cash-out refinance replaces your existing mortgage with a larger loan, and you receive the difference as cash at closing.
A cash-out refinance replaces your first mortgage and existing interest rate with a new mortgage at current market rates, so if you have a low current rate you may lose it. A HELOC is a second lien that leaves your first mortgage intact but comes with a variable rate.
A no-closing-cost refinance means you don’t pay closing costs at closing — instead they’re either rolled into your loan balance (higher principal) or absorbed into a slightly higher interest rate. “No-closing-cost” doesn’t mean free — instead, it means you pay the fees over the course of the loan vs paying them upfront.
Rolling closing costs into the loan preserves cash today but adds to your principal and total interests. It makes sense when you’re cash-constrained and confident you’ll stay in the home long enough for the monthly savings to outweigh the added interest.
*By refinancing the existing loan, the total finance charges may be higher over the life of the loan.
**loanDepot Lifetime Guarantee is non-transferable and does not apply to loans obtained to purchase a new property, new loans that result in the creation of a separate lien on the current property (i.e., a “home equity loan”), renovation loans, bond loan programs, and down payment assistance programs. “Lender fee” does not include discount points associated with the loan transaction nor does it include fee associated with third-party closing costs. Terms and conditions apply. Please refer to the website: http://www.loanDepot.com/lifetime-guarantee for the most current terms and conditions as they are subject to change without notice.
