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Refinancing your mortgage can be a powerful move when managing your finances. Refinancing offers opportunities to lower your monthly payments, shorten your loan term, or access the equity in your home. If you’re considering a mortgage refinance, using a mortgage refi calculator can help you to understand the potential benefits and costs of a refinance, and determine whether refinancing your current mortgage is the right choice for your financial situation.
Key Points
• Using a Pennsylvania mortgage refinance calculator is helpful when you want to estimate potential savings and costs.
• Refinancing your mortgage is typically worthwhile if you can secure a reduction of at least 0.5% in your interest rate.
• Calculating your break-even point using a mortgage refinance calculator is useful for determining whether the savings from refinancing will outweigh the initial mortgage refinancing costs.
• Purchasing mortgage points to lower your interest rate is an optional upfront expense that you should consider in the context of your long-term financial strategy.
• Extending the term of your loan may lower your monthly payments. However, it will also increase the total interest paid over the life of the loan.
• Building your credit score may significantly improve your chances of securing a lower interest rate and more favorable loan terms when refinancing.
Pennsylvania Mortgage Refinance Calculator
Calculator Definitions
• Remaining loan balance: The remaining loan balance is the principal amount you still owe on your home loan. It’s used for determining how soon you can refinance a mortgage.
• Current/New interest rate: Interest is the percentage of the loan amount that the lender charges in exchange for lending you the money. The difference between your current and potential new interest rate factors into whether refinancing will save you money over the long term.
• Remaining/New loan term: The remaining loan term refers to the number of months left to repay your existing mortgage. A new loan term may be either shorter or longer, which will affect your monthly payments and total interest paid.
• Points: Mortgage points are optional upfront fees that you can pay to lower your interest rate. Each point typically costs 1% of the loan amount and can reduce your interest rate by about 0.25%.
• Other costs and fees: These include origination, appraisal, and attorney fees. They typically range from 2% to 5% of the loan amount and should be factored into your cost-benefit analysis.
• Monthly payment: Your monthly mortgage payment consists of both a percentage of the principal amount and interest on the loan.
• Total interest: Total interest is the cost paid to the lender over the loan repayment term, excluding the principal. Compare the total interest for your existing and potential new mortgage before you make the decision to refinance.
How to Use the Pennsylvania Mortgage Refinance Calculator
Use the Pennsylvania home refi calculator to estimate potential savings and your break-even point.
Step 1: Enter Your Remaining Loan Balance
Input the precise remaining loan balance (the amount you still owe on your current mortgage) into the calculator.
Step 2: Add Your Current Interest Rate
You can find this on your mortgage statement or by contacting your lender.
Step 3: Estimate Your New Interest Rate
Estimate your new interest rate by comparing current mortgage rates or by reviewing offers from different lenders. A lower rate can reduce your total costs.
Step 4: Select Your Remaining Loan Term
Input the number of years left on your current mortgage.
Step 5: Choose a New Loan Term
Select a new loan term, which can be from 10 to 30 years. A shorter term reduces the total interest you’ll pay, while a longer term lowers your monthly payments.
Step 6: Enter Any Points You Intend to Purchase
Enter the number of points you plan to purchase. You’ll be able to see how they affect your monthly payments.
Step 7: Estimate Your Other Costs and Fees
Estimate your other costs and fees. These can comprise application fees, lawyer’s charges, and appraisal costs. Then, enter them into the calculator to assess how they affect potential savings.
Step 8: Calculate Your Break-Even Point
Calculate the break-even point, which is the number of months required to begin reaping the benefits of refinancing. Knowing the break-even point could help you determine if refinancing makes sense for you.
Benefits of Using a Mortgage Refinance Payment Calculator
Using a refi mortgage calculator can help you evaluate whether refinancing might lower your monthly payment or interest rate. The calculator provides a detailed comparison of your current and potential new mortgage, showing how different interest rates and loan term lengths can affect your monthly payments and total interest. You may realize significant savings with even a slight reduction in your interest rate, especially if you have a larger mortgage.
A mortgage refinance calculator is also a good starting point in determining how to refinance a mortgage. It will help you consider your reason for refinancing, whether it’s to lower your interest rate, switch to a different type of mortgage loan (such as a fixed-rate loan), or access home equity with a cash-out refinance.
What Is the Break-Even Point in Refinancing?
The break-even point is the time it takes to recoup the closing costs on your refinance through monthly savings. Subtract your estimated monthly payment after refinancing from your current mortgage payment, then divide the closing costs by the monthly savings.
For example, if refinancing saves you $100 a month and your closing costs are $2,500, it would take 25 months to cover those costs and start seeing savings. If you plan to sell the house within two years, refinancing may not be the right strategy. Similarly, you may not want to refinance your current loan if the interest saved in the refi is a negative number.
Current mortgage rates by state.
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 Pennsylvania
Refinancing in Pennsylvania can incur closing costs ranging from 2% to 5% of the loan amount. Fixed fees include the application (up to $500), credit report ($25 to $75), appraisal ($600 to $2,000), recording charges ($25 to $250), and attorney’s fees ($500 to over $1,000). Percentage-based costs include origination (0.5% to 1%), title search/insurance (0.5% to 1%), points, and mortgage insurance. Cash-out refinances often have higher closing costs. Sometimes you can reduce your refi costs by comparison shopping, negotiating fees, and maintaining a good credit score.
Obtaining a no-closing-cost refinance is possible with some lenders, but remember that these loans often carry a higher interest rate.
Assessing how you can lower your monthly payment before beginning the refinancing process is very helpful. It’s advisable to:
• Build your credit score to secure better interest rates.
• Extend the term of your loan to lower monthly payments, though this increases the total interest you’ll pay.
• Shop around for the best rates and terms from different lenders.
• Obtain a lower homeowners insurance rate by increasing your deductible, bundling policies, or making home upgrades.
The Takeaway
Refinancing your mortgage can be a great way to manage your finances, but it requires careful consideration. A mortgage refinance calculator is helpful for estimating potential savings and understanding the financial impact of different refinance scenarios. Assess your financial goals, the length of time you plan to stay in your home, and the break-even point before you make your decision.
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 Pennsylvania?
Refinancing in Pennsylvania typically costs 2% to 5% of the new loan amount. These costs comprise fixed fees, such as application, credit report, and appraisal fees, as well as percentage-based costs, including origination and title insurance. Compare offers and negotiate with lenders to secure the best rates.
How much does it cost to refinance a $300,000 mortgage?
Refinancing a $300,000 mortgage can cost between $6,000 and $15,000 — or 2% to 5% of the new loan amount — including both fixed and percentage-based fees. Use our mortgage refinance calculator to estimate how much you might save and the break-even point.
Do you have to put 20% down to refinance?
You don’t need to put 20% down when refinancing, but having at least 20% equity in your home may be required. You can do some simple math to see if you meet this equity goal. First, subtract the balance you owe on your mortgage principal from your home’s estimated value. Divide the answer by your home’s value to yield the percentage of equity.
At what point is it not worth it to refinance?
Refinancing may not be worth it if your break-even point is longer than you plan to stay in your home. For example, if you have $6,000 in closing costs and save $200 per month, your break-even point is 30 months. The upfront costs may outweigh your savings if you intend to move before that.
What month is best to refinance?
The best time to refinance depends on current mortgage rates and economic trends. Historically, rates tend to be lower in January or February, but it’s often safest to watch current rates and ensure your financial stability before you apply.
Which bank is best for refinancing?
Selecting the best bank for your refinance depends on several factors, including your financial goals and refinancing needs. Compare offers from multiple lenders, and look for transparency, competitive rates, and positive customer reviews.
What credit score do you need for refinancing?
Conventional refinancing typically requires a minimum credit score of 620. However, higher scores might help you secure better rates and terms. Check your credit score, and work on improving it by addressing whatever issues you can. These measures can include paying bills on time, reducing credit card balances, and correcting errors on your credit report.
What are the advantages of refinancing your home?
Refinancing may offer a lower interest rate, which can reduce monthly payments and total interest. It can also provide payment stability if you switch from an adjustable-rate to a fixed-rate mortgage. A cash-out refinance allows borrowers to access additional funds for various purposes, such as home improvements or debt consolidation.
Does refinancing hurt your credit?
A hard credit inquiry might temporarily lower your score, but consistent payments may offset this. It’s usually best to shop for rates within a short period to minimize the effect of repeated credit inquiries.
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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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