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Mortgage refinancing in North Dakota could help you lower your monthly payment, shorten your loan term to save on interest, or tap into the equity in your home. However, there are costs involved, and a mortgage refinance calculator can help you determine whether refinancing is worth it.
Use our North Dakota mortgage refinance calculator to help estimate your monthly mortgage payments and determine your break-even point. Read this guide to learn how to use this helpful tool and figure out if refinancing is right for your financial situation.
Key Points
• Using a North Dakota mortgage refinance calculator can help you make an informed decision about whether refinancing is right for you.
• The break-even point lets you know when the savings from refinancing will outweigh the initial costs.
• Even a small reduction in your interest rate can lead to substantial savings over the life of your home loan.
• Refinancing to a shorter loan term, such as a 15-year mortgage rather than a 30-year mortgage, can reduce total interest paid but is likely to increase monthly payments.
• Make sure you understand all mortgage refinancing costs, including discount points and origination, appraisal, and attorney fees.
Calculator Definitions
• Remaining loan balance: The remaining loan balance represents the principal amount you owe on your home loan.
• Current/New interest rate: Interest is the percentage of the loan amount charged annually by the lender. A new interest rate can significantly affect both your monthly payments and the total interest you’ll pay over the duration of the loan.
• Remaining/New loan term: The remaining loan term is the number of years left on your current mortgage. When refinancing, you can choose a new term, which can affect your monthly payments and total interest paid.
• Points: Mortgage points, or discount points, are optional upfront fees paid to lower the interest rate on your loan. Each point costs 1% of the loan amount and can reduce your interest rate by 0.25%.
• Other costs and fees: Refinancing your mortgage comes with various costs and fees, including those for the lender, credit report, home appraisal, and attorney. Mortgage refinancing costs typically range from 2% to 5% of the total loan amount being refinanced.
• Monthly payment: Your monthly payment covers the principal and interest on your mortgage loan. A home refi calculator helps you compare your current and estimated new monthly payments.
• Total interest: Total interest is the cost you pay to the lender over the duration of the loan, excluding the principal. Compare the total interest paid before refinancing with the projected total interest on the new mortgage to determine your potential savings.
How to Use the North Dakota Mortgage Refinance Calculator
The North Dakota mortgage refinance calculator helps you assess the financial impact of mortgage refinancing. Input the details of your current mortgage and the new loan terms to estimate your monthly payments and total interest.
Step 1: Enter Your Remaining Loan Balance
Enter your remaining loan balance. This figure represents the principal amount you still owe on your current home loan.
Step 2: Add Your Current Interest Rate
Add in your current interest rate. This reflects the cost of borrowing on your existing mortgage. Your interest rate depends on market conditions, your credit history, and the type of mortgage loan you choose.
Step 3: Estimate Your New Interest Rate
Look up the current mortgage rates available in your area. This helps you understand potential savings from refinancing, especially if rates have dropped since you purchased your home.
Step 4: Select Your Remaining Loan Term
Select the number of years left on your current mortgage. This figure allows the tool to estimate how much you’re likely to pay in interest without refinancing.
Step 5: Choose a New Loan Term
Choose a new loan term, which could be different from your current term. A shorter term can reduce the total interest you will pay, while a longer term can lower monthly payments.
Step 6: Enter Any Points You Intend to Purchase
Input points, if any, you plan to purchase. The calculator can estimate whether the reduction in interest rate is likely to be worth the upfront costs.
Step 7: Estimate Your Other Costs and Fees
Enter the amount of other potential costs and fees, such as origination, credit report, home appraisal, and attorney fees. These costs can range from 2% to 5% of the loan amount.
Step 8: Review Your Break-Even Point
Divide the total closing costs by the amount of your monthly savings to determine your break-even point. The calculator shows you this figure, which helps you assess whether refinancing is worth pursuing. Refinancing may be beneficial if you plan to stay in your home longer than the break-even point.
Benefits of Using a Mortgage Refinance Payment Calculator
Our North Dakota mortgage refinance calculator can help you decide whether refinancing could lower your monthly payment or interest rate, potentially saving you money. By comparing your current and potential new mortgages, the calculator will show you whether you could save through lower interest rates or a shorter term. A lower monthly payment could free up funds to put toward other goals, while reduced interest in the long term could save you thousands. Even a small rate reduction (a quarter percentage point, for example), could mean significant savings if you minimize your fees.
What Is the Break-Even Point in Refinancing?
Knowing the break-even point is fundamental in determining whether a mortgage refinance is right for you. The break-even point represents the amount of time required to recoup all closing costs through the resulting monthly savings.
You can determine your break-even point by subtracting your estimated monthly payment after a refinance from your current mortgage payment, then dividing the total closing costs by the amount you are saving each month.
Let’s say refinancing saves you $100 each month, and the total closing costs amount to $2,500. It would take 25 months to cover those upfront costs and begin seeing actual savings. If you plan to sell your home before reaching this point, refinancing might not be the best option.
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 North Dakota
Mortgage refinancing costs in North Dakota tend to cost between 2% to 5% of the new loan amount. First, you have an array of fixed costs: application fees (up to $500), credit report fees ($25-$75), appraisal fees ($600-$2,000), recording fees ($25-$250), and attorney fees ($500-$1,000+).
Then there are percentage-based costs: loan origination (0.5%-1%), title search and insurance (0.5%-1%), and discount points (1% of the mortgage amount per point). Refinancing may not require certain fees, such as title insurance and inspection fees.
Some lenders offer a no-closing-cost refinance. This move will increase the principal and total interest paid, so you’d have to consider whether it’s worth doing.
You may be wondering how you can lower your monthly mortgage payment so you can allot more funds toward other financial goals. Here are some tips:
• Assess your homeowner’s policy and see if you can increase your deductible to reduce your premium.
• Get a discount when you bundle policies (some insurers offer this when you hold both a home and auto policy with them, for example).
• Explore a loan modification. This changes the terms of a loan to make monthly payments more affordable.
• Review your property taxes, and if you think they’re too high, consider appealing.
• Extend the term of your loan to reduce monthly payments (this could increase your total interest paid too however).
The Takeaway
Refinancing your home loan is a significant financial decision, requiring a thorough understanding of the potential advantages and costs. Our North Dakota mortgage refinance calculator gives you the clarity you need by providing estimates of both your monthly and long-term savings. Use the break-even point to help you determine whether refinancing aligns with your financial strategy and budget.
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.
You will want to have at least a 620 credit score for a conventional loan and even higher, such as 700 or better, to land more competitive interest rates and terms. Monitor your credit report and take steps like making on-time payments to improve it.
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 may be required to qualify. To calculate your equity percentage, subtract your remaining loan balance (the principal only) from your home’s estimated value, and divide the result by that value.
Does refinancing hurt your credit?
Refinancing involves a hard credit pull, which can temporarily affect your credit score. Your score is likely to recover if you take steps to improve it, such as consistently making on-time payments.
At what point is it not worth it to refinance?
The break-even point will help you determine when it is worth it to refinance. For example, if it will take 50 months (the break-even point) to recoup refinancing costs, and you plan to move within 30 months, refinancing may not offer financial benefits. Our mortgage refinance calculator can show your break-even point so you can assess the long-term impact.
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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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