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Mortgage refinancing can save you money on monthly payments or long-term interest, but it’s also important to fully understand the potential benefits and possible costs. A Vermont mortgage refi calculator can be a great resource. Our tool helps provide estimates for your monthly payments, shows you the total interest you might pay over the life of the loan and calculates the break-even point, an important figure that helps you determine whether refinancing will outweigh the initial costs.
Key Points
• The refinance calculator helps estimate monthly payments, total interest costs, and the break-even point, all key elements to make an informed refinancing decision.
• Even a quarter percentage point reduction in your interest rate can lead to substantial savings over the life of the loan, making refinancing a potentially advantageous move.
• Extending the term of your loan can lower monthly payments but increase total interest paid. Shortening the term can do the opposite, so consider your financial goals carefully.
Calculator Definitions
• Remaining loan balance: The remaining loan balance is what you owe on your existing mortgage. This affects how soon you can refinance a mortgage, as you usually need to have at least 20% equity in your home.
• 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 loan term represents the duration over which you will be expected to repay your mortgage after completing the refinancing process. Choosing a shorter term can save you a significant amount of money in interest payments over the life of the loan, but it will also lead to an increase in your monthly payments.
• Points: Mortgage points, or discount points, are optional upfront fees you pay a lender to lower your interest rate. Each point usually costs 1% of the total loan amount, but the rate reduction varies by lender.
• Other costs and fees: Other costs and fees include origination, appraisal, and attorney fees. Mortgage refinancing costs tend to range from around 2% to 5% of the new loan amount.
• Monthly payment: Your monthly mortgage payment typically includes the principal and interest. Our refi mortgage calculator can help you compare your current monthly payment with the estimated payment after refinancing to potentially secure better terms.
• Total interest: Total interest is the cost of borrowing over the full term of the loan. To calculate potential savings, compare the total interest you’d pay on your existing mortgage with the projected total interest on a mortgage refinance.
How to Use the Vermont Mortgage Refinance Calculator
A Vermont mortgage refinance calculator estimates savings and costs, helping you decide whether refinancing is beneficial. Here’s how to use the Vermont calculator effectively.
Step 1: Enter Your Remaining Loan Balance
Start by entering your remaining loan balance. This figure represents the principal amount you owe on your current home loan.
Step 2: Add Your Current Interest Rate
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 based on current mortgage rates for your area or offered by lenders.
Step 4: Select Your Remaining Loan Term
Select the number of years that remain on your current mortgage. 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 and see how it affects your monthly payments and total interest. A longer term can lower monthly payments but accrue more interest, while a shorter term can reduce the total interest paid but increase monthly payments.
Step 6: Enter Any Points You Intend to Purchase
Enter any mortgage points, or discount points, you plan to purchase. Points can lower your interest rate, but they come with an upfront cost. The refi mortgage calculator helps assess whether purchasing points is beneficial for your financial situation.
Step 7: Estimate Your Other Costs and Fees
Input other costs and fees, such as lender, appraisal, and attorney fees. These are likely to range from 2% to 5% of the loan amount.
Step 8: Review Your Break-Even Point
The calculator shows your break-even point. You can calculate it yourself: divide the total closing costs by the amount of your monthly savings. If you plan to stay in your home longer than the break-even point, refinancing can be beneficial.
Benefits of Using a Mortgage Refinance Payment Calculator
Using our Vermont mortgage refinance calculator can help you determine whether refinancing is a viable option to lower your monthly payments or interest rate. The tool provides a thorough comparison of your current and potential new terms, including monthly payments, interest rates, and total interest paid.
The calculator also can help you determine how to refinance a mortgage. It shows how different interest rates and loan terms impact your monthly payments and the total interest paid. By experimenting with various scenarios, you can evaluate whether refinancing will save you money in the long term and if the savings outweighs the upfront costs.
What Is the Break-Even Point in Refinancing?
The break-even point is an important factor when deciding whether to refinance your mortgage. This point represents the time it takes to recoup the closing costs on your mortgage refinance through monthly savings. The refi mortgage calculator computes your break-even point by subtracting your new estimated monthly payment from your current mortgage payment, then dividing the closing costs by the monthly savings.
For instance, if refinancing saves you $200 a month and your closing costs are $8,000, it would take 40 months to break even. If you plan to sell your home before reaching this point, refinancing may not be the best strategy.
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 Vermont
Refinancing a Vermont home loan can cost anywhere between 2% to 5% of the new loan amount. As you pursue refinancing, you will want to understand all of the potential fixed costs, such as loan application fees (up to $500), credit report fees ($25-$75), home appraisal fees ($600-$2,000), recording fees ($25-$250), and don’t forget attorney fees ($500-$1,000+).
There are percentage-based costs too, such as loan origination fees (0.5%-1% of the purchase price) and title search and insurance (0.5%-1% of the purchase price).
You can reduce costs by comparing offers from multiple lenders, negotiating, and maintaining a credit score above 740. A cash-out refinance will often have higher closing costs because of the larger loan amount involved. No-closing-cost refinancing may also be possible, but the costs are likely to be rolled into the mortgage amount or interest rate, so this method may not save you money.
If your new monthly payment seems a little burdensome, you may want to figure out how to reduce it. Here are some strategies:
• Build up your credit score so you can secure a lower interest rate.
• Shop around with different lenders and negotiate to get competitive rates and terms.
• Look into extending the term of your loan to reduce monthly payments (this could increase your total interest paid too however).
• Homeowners insurance premiums are often included in mortgage payments, so shop for a lower homeowners insurance rate by increasing your deductible or bundling policies.
The Takeaway
Refinancing your home loan can be a smart move, but you need to understand all potential costs and your break-even point to see if it’s a viable option. Our Vermont mortgage refinance calculator can help you estimate how much you could save each month and over the whole loan term. If you plan to stay in your home long-term and can secure a better rate, refinancing might be a smart move.
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.
The best time to refinance is when interest rates are low and you are financially ready. Monitor rate trends and use our Vermont mortgage refinance calculator to determine what your savings would be if you refinanced.
How much does it cost to refinance your mortgage in Vermont?
Refinancing your mortgage in Vermont typically costs 2% to 5% of the new loan amount. These costs include lender, credit report, appraisal, attorney, and escrow fees.
Does refinancing hurt your credit?
Because refinancing triggers a hard credit pull, it can have a temporary impact on your credit score. Work on managing the new loan responsibly, by making on-time payments, and your credit score could recover.
Which bank is best for refinancing?
The best bank for refinancing will depend on your financial needs. Consider institutions that offer competitive interest rates, reasonable closing costs, and a user-friendly application process. You’ll also want to look at customer service reviews, loan options, and pre-existing relationships.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*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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