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A South Dakota mortgage refinance calculator can greatly assist you in estimating your potential savings and associated costs, making the decision of whether refinancing is the right choice for you much easier to navigate. To use the calculator, enter the details on your current home loan and compare those numbers with what you would pay on a new, refinanced loan. You’ll then see your new estimated monthly payments and how much you could save in interest over time.
Keep reading for more on how to use the South Dakota mortgage refinance calculator and whether or not refinancing is right for you.
Key Points
• A South Dakota mortgage refinance calculator can estimate potential savings and costs, plus help you figure out the break-even point.
• To use the calculator, enter information about your old loan and your ideal new loan. The calculator will then tell you your new monthly payment and interest savings.
• The break-even point is the number of months required for your savings to cover the initial refinancing costs.
• Mortgage refinancing costs typically range from 2% to 5% of the loan amount, and should be considered when deciding whether or not to refinance.
• A higher credit score, ideally 740 or above, can lead to more favorable refinancing terms and lower interest rates.
South Dakota Mortgage Refinance Calculator
Calculator Definitions
• Remaining loan balance: The remaining loan balance is the principal amount you still owe on your home loan.
• Current/New interest rate: Interest is the percentage of the loan amount charged by the lender. The current interest rate is what you’re now paying, and may be fixed or variable. The new interest rate can significantly affect your monthly payments and total interest paid.
• 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 refinanced loan. Consider the trade-offs between shorter and longer terms.
• Points:Mortgage points, or discount points, allow you to prepay a portion of the interest at closing. Each point costs 1% of the loan amount and can reduce your interest rate.
• Other costs and fees: Other costs include origination, appraisal, and attorney fees. These typically range from 2% to 5% of the loan amount.
• Monthly payment: Your monthly payment includes the principal and interest. Use the South Dakota mortgage refinance calculator to estimate the impact of different rates and terms.
• Total interest: Total interest is the cumulative cost paid to the lender over the loan’s life. Compare your current total interest with the projected total interest for the refinanced loan.
How to Use the South Dakota Mortgage Refinance Calculator
To use the South Dakota mortgage refi calculator, enter your remaining loan balance, current interest rate, estimated new interest rate, new loan term, and any points you intend to purchase. Here’s a step-by-step guide to walk you through the calculator.
Step 1: Enter Your Remaining Loan Balance
Start by entering your remaining loan balance into the South Dakota mortgage refinance calculator. This is the principal amount you still owe on your current home loan.
Step 2: Add Your Current Interest Rate
Next, input your current interest rate. This helps estimate your current monthly payment and total interest costs, which can be compared with potential new rates and terms. 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
Estimate your new interest rate by inputting the current mortgage rates available in your area. This helps you understand potential savings from refinancing, especially if rates have dropped or you’ve built your credit score since you initially purchased your home.
Step 4: Select Your Remaining Loan Term
Input the number of years left on your current mortgage into the refi calculator. This estimates the total interest you’d pay if you kept your current mortgage.
Step 5: Choose a New Loan Term
Choose a new loan term that aligns with your financial goals. A longer term can lower monthly payments, while a shorter term can reduce total interest paid over the life of the loan.
Step 6: Enter Any Points You Intend to Purchase
Enter any discount points you plan to purchase. Points can lower your interest rate, but they come with an upfront cost. Use the calculator to assess if purchasing points is beneficial for your financial situation.
Step 7: Estimate Your Other Costs and Fees
Estimate other 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. Use the home refi calculator to see how these costs impact your potential savings.
Step 8: Review Your Break-Even Point
Calculate your break-even point. To do this, the calculator subtracts your new monthly payment from your current payment and divides the closing costs by the monthly savings. If you plan to stay in your home longer than this point, refinancing can be a smart financial move.
Benefits of Using a Mortgage Refinance Payment Calculator
Housing is a major monthly expense. A mortgage refinance calculator helps you determine if mortgage refinancing can lower your payment or interest rate, potentially saving money. The calculator also reveals when refinancing isn’t beneficial, such as when high interest rates or closing costs negate savings.
By inputting various rates and terms, you can understand refinancing’s impact on payments and total interest. Even a small rate reduction can yield significant savings, especially with minimized fees. Refinancing from a 30-year to a 15-year loan accelerates mortgage payoff and saves considerable interest, but you will typically have a higher monthly payment.
If you have an adjustable-rate mortgage (ARM) and worry about rate hikes, the calculator compares your current costs to those of a fixed-rate mortgage.
One of the most important things that can help determine whether or not refinancing is worth it is the break-even point. This is the number of months it will take for the savings from your new mortgage to cover the closing costs of refinancing.
To find your break-even point, subtract your estimated monthly payment after refinancing from your current mortgage payment, then divide the closing costs by the monthly savings. For instance, if refinancing saves you $100 a month and your closing costs are $2,500, it will take 25 months to recoup those costs. If you plan to sell your home within two years, refinancing may not be the best strategy. If the interest saved in the refinance shows a negative number, it might indicate that refinancing isn’t a wise financial decision.
There is one exception to this rule: a cash-out refinance, where you’re tapping into your home equity rather than looking to save money on interest. Cash-out refinances typically don’t save money, since the new loan amount is larger than the current loan amount.
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 South Dakota
Mortgage refinancing costs in South Dakota are typically 2% to 5% of the new loan. Fixed costs include application, credit report, appraisal, recording, and attorney fees. Waiving the appraisal can save money.
Percentage-based costs include origination, title search/insurance, and points. Some refinance fees, like title insurance, aren’t always required. You can lower costs by shopping around, negotiating, and maintaining a strong credit score (740+).
Also, be aware of no-closing-cost refinances. While they can be eye-catching, they’re a bit misleading, since many lenders will increase your interest rate to cover the cost of closing fees. Make sure to read the fine print before signing.
• Extend the term of your loan to lower monthly payments.
• Eliminate private mortgage insurance by having 20% equity in the home.
• Shop for a lower homeowners insurance rate to decrease your total monthly cost.
The Takeaway
Refinancing your mortgage may help you save money or access home equity, but it requires careful consideration and planning. A South Dakota mortgage refinance calculator can provide valuable insights into potential savings and costs, and help you determine the break-even point. You can then make an informed decision as to whether or not refinancing is right for your financial situation and 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 South Dakota?
Refinancing your mortgage in South Dakota involves several costs, typically ranging from 2% to 5% of the new loan amount. For a $200,000 mortgage, this could be between $4,000 and $10,000.
How much does it cost to refinance a $300,000 mortgage?
Refinancing a $300,000 mortgage involves costs typically ranging from 2% to 5% of the loan amount, or between $6,000 and $15,000. This includes loan application fees, credit report fees, home appraisal fees, recording fees, and attorney fees.
Do you have to put 20% down to refinance?
You don’t need to put 20% down to refinance. Most lenders require at least 20% equity to avoid private mortgage insurance (PMI), but this doesn’t mean a 20% down payment is necessary.
At what point is it not worth it to refinance?
Refinancing may not be worth it if you’ll sell your home before the break-even point, which is when your savings cover the closing costs. It may also not be worth it if the interest rate reduction is less than 0.50%.
What month is best to refinance?
The best month to refinance can vary, but it’s best to refinance when market conditions have improved since you purchased your home or you’ve built your credit score and can qualify for a better rate.
Which bank is best for refinancing?
The best bank for refinancing depends on interest rates, terms, and customer service. Compare rates, read reviews, and ask for recommendations to find the best option.
What credit score do you need for refinancing?
A minimum credit score of 620 is typically required for conventional loans, but a score of 740 or above can secure better terms and lower interest rates.
What are the advantages of refinancing your home?
There are many advantages to refinancing your home, including lowering monthly payments and total interest paid, switching from an ARM to a fixed-rate mortgage, and accessing home equity for various expenses.
Does refinancing hurt your credit?
Refinancing can temporarily lower your credit score due to a hard inquiry but can improve it over time with lower monthly payments and consistent, on-time payments.
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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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