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Refinancing your home loan can be a strategic financial move that allows you to save money, change the type of mortgage loan you have, or access the equity you’ve built in your home. A mortgage refinance calculator helps you evaluate the financial impact of refinancing your current mortgage. Inputting details of your current loan and any proposed refinance terms could give you a clearer picture of your refinancing costs and potential savings, helping you make an informed decision about how to proceed.
Key Points
• A Maryland mortgage refinance calculator can help homeowners evaluate the potential financial impact of refinancing their home loan.
• The refinance calculator can estimate monthly payments, total interest, and the break-even point, which help determine whether refinancing will be beneficial.
• Mortgage refinancing costs typically range from 2% to 5% of the loan amount, and a refinance calculator can help you factor these expenses into your decision.
• Purchasing points can lower your interest rate and monthly payments, but you should use a refinance calculator to evaluate the time it will take for the savings to cover the upfront cost.
• Reducing your loan term can reduce the total interest paid but increase monthly payments, while extending the term can do the opposite, so use a calculator to evaluate which could help you meet your financial goals.
Maryland Mortgage Refinance Calculator
Calculator Definitions
• Remaining loan balance: The remaining loan balance is the principal amount you still owe on your current mortgage. This amount is key to knowing how soon you can refinance a mortgage.
• Current/New interest rate: Interest is the percentage of the total loan amount charged by the lender. A lower interest rate can reduce monthly payments and total interest paid over the life of the loan.
• Remaining/New loan term: The remaining loan term is the number of months left on your current mortgage. Your new loan term can be shorter or longer, depending on how you choose to meet your financial goals. A shorter term could reduce total interest but increase your monthly payments.
• Points: Points are optional upfront fees that reduce your interest rate. Each point usually costs 1% of the loan amount and can lower your interest rate by 0.25%. It’s important to evaluate cost against potential savings when deciding whether to purchase points.
• Other costs and fees: Refinancing is associated with various costs, including origination fees, appraisal fees, and attorney fees. These typically range from 2% to 5% of the new loan amount.
• Monthly payment: Your monthly payment includes the principal and interest. A refinance calculator can help you compare your current monthly payment with the estimated payment after refinancing. Making lower monthly payments could free up cash flow, but that does not necessarily mean you’re saving in the long term.
• Total interest: Total interest is the cost paid to the lender over the life of the loan, excluding the principal. Compare total interest paid for your current mortgage with the projected total interest after refinancing to assess your potential long-term savings.
How to Use the Maryland Mortgage Refinance Calculator
To use the Maryland mortgage refinance calculator, input your remaining loan balance, current interest rate, estimated new interest rate, remaining loan term, new loan term, points you intend to purchase, and other costs and fees. The calculator will estimate the potential savings, costs, and break-even point of your mortgage refinance.
Step 1: Enter Your Remaining Loan Balance
Enter your remaining home loan balance, the principal amount you still owe on your current mortgage.
Step 2: Add Your Current Interest Rate
Input your interest rate so the calculator can estimate your monthly payment and total interest for your current loan. You can find this on your latest mortgage statement or by contacting your lender.
Step 3: Estimate Your New Interest Rate
Estimate your new interest rate by looking at offers from different lenders or checking online for current mortgage rates in your area. A lower rate could offer savings by reducing your monthly payments and total interest paid, particularly if rates have dropped since you took out your initial loan.
Step 4: Select Your Remaining Loan Term
Enter the number of years left on your mortgage. The home refi calculator will estimate the total interest you’ll pay if you remain on your current loan terms.
Step 5: Choose a New Loan Term
Choose a new loan term to help you evaluate how refinancing could help you meet your financial goals. A longer term can lower monthly payments, while a shorter term can save on interest.
Step 6: Enter Any Points You Intend to Purchase
Enter any discount points you plan to purchase. Each point costs 1% of the loan amount and lowers the interest rate by 0.25%. Use the refi mortgage calculator to identify whether the interest savings outweigh the up-front cost.
Step 7: Estimate Your Other Costs and Fees
Estimate other costs and fees, such as application, credit report, home appraisal, and attorney fees. Enter these into the calculator to see the impact on your potential savings.
Step 8: Review Your Break-Even Point
Review your break-even point, the number of months it will take for the total savings from the new loan to equal the total cost of refinancing. Depending on your financial goals and how long you plan to stay in your home, you can use this information to determine whether refinancing is financially beneficial.
Benefits of Using a Mortgage Refinance Payment Calculator
A mortgage refinance calculator can help you evaluate whether refinancing could lower your monthly payment or interest rate and offer you long-term savings. It gives a thorough comparison of your current and potential loan terms, including monthly payments, interest rates, and total interest paid, allowing you to identify whether refinancing could be beneficial.
By entering different interest rates and loan terms, the calculator can help you identify how to refinance a mortgage to meet your financial goals. Reducing your monthly payment can free up funds for other purposes, while paying less total interest could mean significant savings over the duration of the loan.
What Is the Break-Even Point in Refinancing?
One of the most important things a mortgage refinance calculator estimates is the break-even point. This is when the savings from your new mortgage cover the closing costs of refinancing. To calculate your break-even point manually, you first calculate your monthly savings by subtracting your estimated monthly payment after refinancing from your current mortgage payment, then divide the total closing costs by this value.
For example, if refinancing saves you $100 a month and your closing costs total $2,500, it would take 25 months to recoup those costs and begin seeing savings. If you plan to stay in your home longer than this, refinancing could be beneficial. If you don’t see any noticeable savings or you’re getting a negative number, it might make sense to keep your current mortgage.
Current mortgage rates by state.
Compare current home interest rates by state and find a mortgage rate that suits your financial goals.
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Typical Closing Costs for a Refinance in Maryland
Mortgage refinancing costs in Maryland are typically 2% to 5% of the new 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 origination fees (0.5%-1%), title search and insurance (0.5%-1%), and points (1% of the mortgage amount per point). When refinancing, you may not be subject to certain purchase-related costs, such as title insurance and inspection fees.
To reduce your refinancing costs, compare offers from different lenders, negotiate fees, and keep your credit score as high as possible. Watch out for prepayment penalties and be cautious of no-closing-cost refinance offers as the interest rate is often increased to cover the closing fees, meaning they are not necessarily better value. Refinancing a jumbo loan may have higher associated costs.
Tips on Reducing Your Mortgage Refinance Payment
To reduce your mortgage refinance payment, minimize your monthly mortgage payment before beginning the refinancing process. It may be beneficial to:
• Improve your credit score to secure a lower interest rate.
• Extend the term of your loan but be aware this increases the total interest paid.
• Appeal your property tax to potentially lower your annual tax bill.
• Shop for a lower homeowners insurance rate by increasing your deductible, bundling policies, or making your home more secure or storm-resistant.
The Takeaway
Refinancing your mortgage can be a way to save on monthly payments and the total interest you pay over the duration of your loan, but you should evaluate the costs and savings carefully. A mortgage refinance calculator can estimate monthly payments and total interest for a refinanced loan which you can compare to your current terms. Consider these figures and your break-even point to make an informed decision about proceeding with refinancing.
Whether you want to secure a lower interest rate, switch to a different type of loan, or access the equity you’ve built up in your home, the refi calculator can help you understand the potential financial impact and determine how refinancing aligns with your long-term financial goals.
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 mortgage in Maryland?
Mortgage refinancing in Maryland typically costs 2% to 5% of the new loan amount. This includes application, appraisal, title search, and credit report fees. Compare offers from lenders and negotiate fees to reduce your refinancing expenses.
How much does it cost to refinance a $450,000 mortgage?
Refinancing a $450,000 mortgage generally costs between $9,000 and $22,500, including origination, recording, attorney, and mortgage insurance fees. Use the break-even point estimated by a refinance calculator to decide whether your potential savings outweigh these costs.
Do you have to put 20% down to refinance?
You don’t need to put 20% down to refinance but having at least 20% equity can help you avoid private mortgage insurance or mortgage insurance premium payments. Calculate your equity percentage by subtracting the balance you owe on your mortgage principal from the estimated value of your home and then dividing this by your home’s value.
At what point is it not worth it to refinance?
If your break-even point extends beyond the amount of time you intend to stay in your home, refinancing may not be worthwhile. A refinance calculator can estimate this point and help you decide whether refinancing will be beneficial.
What month is best to refinance?
The best month to refinance depends on prevailing mortgage rates and your financial goals. Interest rates are often lower in fall and winter due to decreased home buying activity. Monitor rates and consider factors such as your credit score and home equity before starting the refinancing process.
Which bank is best for refinancing?
The best bank for refinancing depends on your financial situation and goals. Compare interest rates, terms, and fees from multiple lenders and consider their reputation, customer service, and online tools to find a bank that suits you.
What credit score do you need for refinancing?
Most lenders require you to have a minimum credit score of 620 for a conventional loan, but a higher score of 700 or above, can help you secure better rates. Check your credit report and take steps to improve your score before applying for refinancing.
What are the advantages of refinancing your home?
Refinancing can potentially secure you a lower interest rate, reducing your monthly payments and total interest. You could also refinance to switch mortgage type, or complete a cash-out refinance to access home equity for debt consolidation or home improvements.
Does refinancing hurt your credit?
Refinancing can temporarily lower your credit score due to a hard inquiry. However, the benefits of a lower interest rate or shorter loan term often allow your score to recover from the initial dip and improve in the long term.
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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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