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Refinancing your mortgage in Louisiana allows you to adjust your loan terms to better suit your current financial situation, or even access the equity you’ve built up in your home over time. A Louisiana mortgage refinance calculator can help you determine if refinancing your current home loan is indeed the right financial move for you and your family.
Keep reading for more on refinancing your mortgage in Louisiana, whether or not it’s worth it, and how to use the Louisiana mortgage refi calculator.
Key Points
• The Louisiana mortgage refinance calculator can estimate your potential savings and new monthly payments, ensuring that refinancing aligns with your financial goals.
• Check current mortgage rates to determine if they are significantly lower than your existing rate, as this will help you decide if you should refinance.
• Be aware of all potential mortgage refinancing costs, which can range from 2% to 5% of the total loan amount.
• Consider the break-even point, which is the time it takes for the savings from your new mortgage to cover the upfront costs of refinancing.
• Building your credit score to 740 or above can help you secure better interest rates, potentially reducing your monthly payments and total interest paid.
Louisiana Mortgage Refinance Calculator
Calculator Definitions
• Remaining loan balance: The remaining loan balance is the principal amount you still owe on your current home loan.
• Current/New interest rate: Interest is the percentage of the loan amount charged by the lender. Interest rates are determined based on credit history, market trends, and the type of mortgage loan. A lower new interest rate can reduce monthly payments and total interest paid over the loan’s life.
• Remaining/New loan term: The remaining loan term is the number of months left on your current mortgage. The new loan term is the duration of the proposed refinance.
• Points: Mortgage points are optional upfront fees that lower your interest rate. Each point costs 1% of the loan amount and can reduce the rate by 0.25%.
• Other costs and fees: Refinancing involves various costs, including origination fees, appraisal fees, and attorney fees. These typically range from 2% to 5% of the loan amount.
• Monthly payment: Your monthly payment is the amount you pay each month toward your principal balance and interest. It may also include homeowners insurance, private mortgage insurance, and homeowners association (HOA) fees.
• Total interest: Total interest is the cost of borrowing, excluding the principal. Comparing total interest for your current and potential refinance can help determine long-term savings.
How to Use the Louisiana Mortgage Refinance Calculator
To use the Louisiana mortgage refinance calculator, input your current mortgage details and proposed refinance terms. The calculator will estimate your new monthly payment and total interest savings. Here is a step-by-step guide on how to use the calculator.
Step 1: Enter Your Remaining Loan Balance
Start by entering your remaining loan balance, which is the principal amount you still owe. This figure helps the calculator estimate your potential savings and costs.
Step 2: Add Your Current Interest Rate
Input your current interest rate to understand your current monthly payments and total interest. This helps in assessing potential savings with a new rate.
Step 3: Estimate Your New Interest Rate
Research current mortgage rates and input your anticipated new interest rate. A lower rate can reduce monthly payments and total interest paid.
Step 4: Select Your Remaining Loan Term
Enter the number of months left on your current mortgage. This helps in comparing your current and new loan terms.
Step 5: Choose a New Loan Term
Select a new loan term, which can be shorter or longer than your current term. A shorter term can reduce total interest paid but increase monthly payments. A longer term can lower monthly payments but increase total interest costs.
Step 6: Enter Any Points You Intend to Purchase
Input any mortgage points you plan to purchase. Each point costs 1% of the loan amount and can lower the interest rate by 0.25%.
Step 7: Estimate Your Other Costs and Fees
Estimate other costs, such as lender fees, appraisal fees, and attorney fees. These typically range from 2% to 5% of the loan amount.
Step 8: Review Your Break-Even Point
Calculate your break-even point by subtracting your estimated monthly payment after refinancing from your current mortgage payment, then dividing the closing costs by the monthly savings.
Benefits of Using a Mortgage Refinance Payment Calculator
A mortgage refinance calculator helps determine if a mortgage refinance can lower your monthly payment or interest rate, freeing up funds for other goals. It also reveals potential losses. By inputting different rates and loan terms, you can understand how refinancing impacts your monthly payment and total interest paid.
Lower monthly payments offer short-term savings, while lower total interest saves long-term. Even a small rate change on a large home loan can yield significant savings, especially with minimized lender fees. Refinancing from a 30-year to a 15-year loan accelerates mortgage payoff and can substantially reduce total interest.
And finally, if you have an adjustable-rate home loan (ARM), the calculator can compare your current costs to fixed-rate options.
What Is the Break-Even Point in Refinancing?
The break-even point is the number of months it takes to recoup the closing costs on your refinance. To find this, subtract your estimated new monthly payment from your current payment and divide the closing costs by the monthly savings.
For example, if refinancing a mortgage saves you $100 a month and your closing costs are $2,500, it would take 25 months to break even. If you plan to sell the house before this point, refinancing might not be beneficial.
The exception to this rule is a cash-out refinance, where you’re tapping into your home equity rather than looking to save money on interest.
Compare current home interest rates by state and find a mortgage rate that suits your financial goals.
Select a state to view current rates:
Typical Closing Costs for a Refinance in Louisiana
Mortgage refinancing costs in Louisiana range from 2% to 5% of the new home loan amount. Fixed costs include application fees (up to $500), credit reports ($25-$75), appraisals ($600-$2,000), recording fees ($25-$250), and attorney fees ($500-$1,000+).
Percentage-based costs include loan origination (0.5%-1%), title search/insurance (0.5%-1%), and points. Some fees, like title insurance and inspections, are not required for refinancing. Comparison shop, negotiate with lenders, and maintain a 740+ credit score to lower costs.
While “no-closing-cost refinance” promotions are eye-catching, they’re a bit misleading, since many lenders will increase your interest rate to cover the cost of closing fees. Comparison shop lenders and loans to make sure you’re getting the best deal.
Here are some ways you can lower your mortgage refinance payment:
• Build up your credit score to secure better interest rates.
• Extend the term of your home loan to lower monthly payments.
• Shop for a lower homeowners insurance rate to decrease your monthly expenses.
• Shop around for the best rates and terms to find the most competitive offers.
The Takeaway
Refinancing your home loan can be a powerful tool to manage your finances effectively. A Louisiana mortgage refinance calculator helps estimate costs and savings, and understand new monthly payments. Whether you aim to lower your interest rate, change your loan term, or access home equity, the refinance calculator is essential for informed decision-making.
SoFi can help you save money when you refinance your mortgage. Plus, we make sure the process is as stress-free and transparent as possible. SoFi offers competitive fixed rates on a traditional mortgage refinance or cash-out refinance.
A mortgage refinance could be a game changer for your finances.
How much does it cost to refinance your home loan in Louisiana?
Refinancing costs in Louisiana typically range from 2% to 5% of the new home loan amount. These include lender fees, credit report fees, appraisal fees, title search and insurance, and escrow fees.
How much does it cost to refinance a $300,000 home loan?
Refinancing a $300,000 home loan can cost between $6,000 and $15,000, or 2% to 5% of the loan amount. These costs include lender fees, appraisal fees, title search and insurance, and other closing costs.
Do you have to put 20% down to refinance?
No, you don’t need to put 20% down to refinance. However, having at least 20% equity can help avoid private mortgage insurance (PMI).
At what point is it not worth it to refinance?
Refinancing may not be worth it if the break-even point extends too far into the future. For example, if your closing costs are $5,000 and monthly savings are $100, it would take 50 months (just over four years) to break even. If you plan to sell your home before this point, refinancing might not be beneficial.
What month is best to refinance?
The best month to refinance depends on current mortgage rates and your financial situation. If you plan to stay in your home long-term and rates are trending downward, refinancing could be a prudent decision.
Which bank is best for refinancing?
Choosing the best bank for refinancing depends on your financial needs and the terms they offer. Consider factors like current mortgage rates, loan terms, refinancing costs, and customer service. Compare offers from multiple lenders to find the one that provides the most competitive interest rates and favorable repayment terms.
What credit score do you need for refinancing?
A credit score of at least 620 is typically required for conventional loans. Higher scores can secure better interest rates and terms. Check your credit report for errors and build your score if necessary.
What are the advantages of refinancing your home loan?
Refinancing can lower monthly payments, reduce total interest paid, switch to a fixed-rate loan, or access home equity. However, consider the refinancing costs, which can be 2% to 5% of the loan amount. Use a mortgage refinance calculator to assess the benefits and determine if refinancing aligns with your financial goals.
Does refinancing hurt your credit?
Refinancing can temporarily affect your credit score due to a hard inquiry. This impact is usually short-lived and can be mitigated by rate shopping within a short timeframe. Timely payments on your new loan can help your score recover and improve.
SoFi Mortgages
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
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