Refi Break even CalculatorCalculator Refi Break-Even
When refinancing the loans, compute the number of month to break even. Information provided by these computers is for illustration only. Presented defaults are approximate and may not apply to your particular circumstances. Make sure you seek the advice of a finance expert before you rely on the results.
Computed results are for illustration only and do not guarantee precision.
Calculation of your refinancing break even analysis - Primary Residential Mortgage, Inc. - California
You have many good reason to consider funding a hypothec. Change from a variable-rate mortgages to a fixed-rate one, cut your recurring payments or use some of the capital in your home for improvement. The most important step you can take when you decide whether or not to obtain funding - especially if you want to lower your recurring payments by lowering your interest rates - is to conduct a funding break even analysis.
Funding Break Even Analysis will help you identify where the amount you save each and every months will exceed the funding outlay. If your mortgages have no out-of-pocket charges and you roll the funding charges into the new loans, you will want to perform your funding break even analysis to make sure you make the best one.
Analyzing is relatively easy if you know all the different parts. There are two basic computations for the analyses. To perform the parsing, you must know three major numbers: As soon as we know these three numbers, just insert them into the above computation. Let's do a walkthrough so you can see how it works.
Both Steve and Linda consider funding their house to reduce their payments. Your actual cash flow is $1,500 per month and, as interest levels are low today, your suggested new cash flow will be $1,350 per month. You have also talked to a lender who has put the overall costs of funding at $5,500.
Now we just take their numbers and type them into the two calculations: So we can see that it will take Steve and Linda just under 37 month for their saving to exceed their refinancing costs. Getting before their 37-month break-even point would never really make them saving up.
Actually, it will take them even more than if they hadn't done anything! You will now see why it is so important to perform a break even analysis before making the final decide to re-finance your existing mortgages. If you have any queries about funding your mortgages or would like help in calculating your funding break-even analysis, our seasoned lending staff is there to help.