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Refinancing your home loan in Washington 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 with refinancing, and a mortgage refinance calculator can help you determine if refinancing is worth it.
Our Washington mortgage refinance calculator estimates your monthly mortgage payments, accounts for fees, and helps you determine your break-even point. Keep reading to learn how to use the Washington mortgage refinance calculator and to figure out if refinancing is right for your financial situation.
Key Points
• A Washington mortgage refinance calculator can help you estimate potential savings and costs, making it easier to decide if refinancing is right for you.
• The break-even point allows you to determine when the savings from refinancing will outweigh the initial costs.
• Switching from an adjustable-rate mortgage to a fixed-rate mortgage can provide financial stability and protection against future rate increases.
• Extending the loan term can lower monthly payments but increase the total interest paid over the life of the loan, while shortening the term can do the opposite.
• Building your credit score can lead to more favorable interest rates and terms, potentially saving you a significant amount of money on your refinance.
Washington Mortgage Refinance Calculator
Calculator Definitions
• Remaining loan balance: The remaining loan balance is the principal amount you still owe on your current home loan.
• Current/New interest rate: Interest is the percentage of the total loan amount that the lender charges. The difference between your current and new interest rates will determine potential savings from refinancing.
• Remaining/New loan term: The remaining loan term is the time left to repay your existing mortgage. The new loan term is the duration of the proposed refinance.
• Points:Mortgage points are upfront fees paid to the lender to reduce the interest rate. Each point costs 1% of the loan amount and can lower your monthly payments.
• Other costs and fees: Other costs and fees include origination, appraisal, attorney fees, and closing costs. These typically range from 2% to 5% of the new loan amount.
• Monthly payment: Your monthly payment includes the principal and interest on your home loan. It may also include homeowners insurance and property taxes.
• Total interest: Total interest is the cost you pay to the lender over the life of the loan, excluding the principal amount. Comparing the total interest of your current and potential refinance loans helps determine long-term savings.
How to Use the Washington Mortgage Refinance Calculator
Input your current and proposed loan details into the calculator to estimate potential savings and assess if refinancing aligns with your financial goals. Here’s a step-by-step guide on how to use the calculator.
Step 1: Enter Your Remaining Loan Balance
Enter your remaining loan balance into the Washington mortgage refinance calculator. Your loan balance influences your monthly payments and interest costs. Check your most recent mortgage statement or contact your lender.
Step 2: Add Your Current Interest Rate
Input your current interest rate to serve as the baseline for comparing potential new rates. This helps you understand the savings you might achieve with a lower rate. Your interest rate depends on market conditions, your credit history, and the type of mortgage loan.
Step 3: Estimate Your New Interest Rate
Check current mortgage rates from various lenders to estimate your new interest rate. Input this rate into the calculator to see the impact on your monthly payments and total interest savings.
Step 4: Select Your Remaining Loan Term
Input your remaining loan term to understand the total interest you will pay on your current mortgage. This helps you compare the financial impact of extending or shortening the term.
Step 5: Choose a New Loan Term
Select a new loan term to see how it affects your monthly payments and total interest paid. Shorter terms reduce interest but increase payments, while longer terms do the opposite.
Step 6: Enter Any Points You Intend to Purchase
Input any points you plan to purchase. Points can lower your interest rate and monthly payments, but they increase upfront costs.
Step 7: Estimate Your Other Costs and Fees
Input all other costs and fees, such as origination, appraisal, and attorney fees, to get a comprehensive view of the total expenses involved in refinancing. These costs can range from 2% to 5% of the loan amount.
Step 8: Review Your Break-Even Point
The calculator computes the break-even point by subtracting your new monthly payment from your current payment and dividing 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
A mortgage refinance calculator helps you estimate new monthly payments and potential interest savings before applying, giving you a clearer picture of how mortgage refinancing could affect your budget. By comparing your current loan terms to new rates and loan lengths, you can quickly see whether refinancing may lower your payment or help you pay off your mortgage faster.
You can also refinance from a 30-year to a 15-year loan. Doing this 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.
The break-even point is the number of months it takes to recoup the closing costs associated with refinancing. To find this, subtract your estimated new monthly payment from your current payment, then divide the closing costs by the monthly savings. If the break-even point is longer than your planned stay, refinancing may not be worth it.
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.
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 Washington
Mortgage refinancing costs in Washington typically range from 2% to 5% of the new loan amount. Fixed costs include application fees, credit report fees, and recording fees. 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.
If your new mortgage refinance payment feels like a financial stretch, there are ways you can try to nudge it down.
Build Your Credit Score
Your credit score plays a significant role in refinancing. A score of 740 or above often qualifies for the best interest rates. Build your score by paying bills on time, reducing credit card balances, and checking your credit report for errors.
Extend the Term of Your Loan
Extending the term of your loan can reduce monthly payments. For example, extending from a 15-year to a 30-year mortgage will lower payments but increase total interest paid over the life of the loan.
Shop for a Lower Homeowners Insurance Rate
Comparing homeowners insurance quotes can help you find a lower rate. Consider increasing your deductible, bundling policies, or making home upgrades to reduce premiums. Contact multiple providers to compare rates and coverage options.
The Takeaway
Using a Washington mortgage refinance calculator estimates potential savings, helps you understand the impact of different loan terms, and determines the break-even point. Input your current and proposed loan details to see your estimates and make an informed decision. Consider all factors, including closing costs, prevailing interest rates, and your planned stay in the home, to ensure refinancing aligns with your 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 Washington?
Refinancing your mortgage in Washington involves various costs, typically 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 typically costs between $6,000 and $15,000. This includes loan application, credit report, home appraisal, recording, and attorney fees.
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 (PMI).
At what point is it not worth it to refinance?
Refinancing may not be worth it if the break-even point is longer than your planned stay in the home or if the interest rate reduction is minimal. To calculate the break-even point, subtract your estimated monthly payment after refinancing from your current mortgage payment, then divide the closing costs by the monthly savings.
What month is best to refinance?
The best month to refinance depends on market conditions and your financial readiness. If rates have gone down or you’ve built your credit score since you purchased your home, refinancing may make sense for you.
Which bank is best for refinancing?
Choosing the best bank for refinancing involves comparing rates, fees, and terms from multiple lenders. Also consider customer service, loan options, and the bank’s reputation.
What credit score do you need for refinancing?
A minimum credit score of 620 is typically required for conventional loans. A higher score can secure better rates and terms. Check your credit report for errors and take steps to build your score.
What are the advantages of refinancing your home?
Refinancing can lower monthly payments or reduce total interest paid, and provide financial stability.
Does refinancing hurt your credit?
Refinancing can have a minimal and temporary impact on your credit score due to hard inquiries. This impact can be mitigated by applying with multiple lenders within a short period. Long-term benefits, such as lower payments and reduced interest costs, can build your financial health and credit score.
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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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