When you refinance you want to arm yourself with plenty of useful information prior to contacting a lender for a loan. Part of this information can and should be acquired through the use of refinance calculators. Why? Because these calculators are great tools to help you get a snapshot of what you will be saving – or spending- by pursuing a particular loan. Nobody wants to lose money on a refinance but sometimes it’s hard to determine what the impact will actually be on your finances. By laying it all out for you, the calculator can be a great tool for making the right decision.
Types of Refinance Calculators
When you start plugging your numbers into the calculator, keep in mind that not all calculators are created equal for every situation. As a homeowner you are more than likely dealing with one of four scenarios. The first, you are trying to lower your interest rate in the hopes that your mortgage payment and overall mortgage cost will be reduced. Second, you are stuck with an ARM loan and your rates are about to start adjusting – always a scary thing for a homeowner. Third, you want to get your hands on some cash for other investments or loan consolidation. And fourth, your home has lost some value and you’re looking to reduce your mortgage terms by switching to a new mortgage.
The reasons these four scenarios are mentioned is because depending on where you fall in the spectrum, you are going to want to look at different refinance calculators. Yes, there are plenty of calculators that will give you a base point to go off of, but if you can find one that is geared toward your specific scenario, you will be able to get a more accurate assessment of what you can expect to get through the refinance. So the calculators that you need to look for will be lower net cost refi calculators, cash out refi calculators, cash in refi calculators, and ARM refi calculators. Again, the type will depend on your particular financial situation.
Working With Your Lender
Refinance calculators are not the end all when it comes to adjusting your loan. They are simply a tool to help you stay better informed. When refinancing you always want to work very closely with a variety of lending institutions, until you choose the one that will work best for your needs. What you want to do as a homeowner is get multiple quotes from multiple lending institutions and then plug each of these quotes into the calculator, comparing each of them with your existing mortgage. Oftentimes you will find that a different lending institution will serve you better than the company you are currently working with. However, prior to switching to a new company, bring the quote that is most appealing to you to your lending institution and see if they can work a better deal with you. No company wants to lose business and you may find that they are willing to make a few adjustments to keep you working with them.
The key to remember when refinancing your home regardless of the situation is that while the lending institution is fronting the money for you, you are still their customer and they still need your business. Don’t just assume that the up-front quote and fees that they give you are set in stone. More often than not those things can be tweaked until they better serve both the lending institution and the homeowner.
It’s also important to remember that refinancing isn’t something you should do alone – ever. There are plenty of loan officers and professionals that know a lot more than you do about this particular area of finances and you would be wise to take advantage of their expertise. A good loan officer can help you get the right loan at the right cost while still keeping the lending institution happy. So always make sure you have a good team of professionals on your side ready and able to help you get the loan you need.
At the end of the day your refinance has to help you out financially otherwise you will quickly find that it wasn’t worth the initial cost. So pay very close attention to all of the numbers from your interest rate to the annual percentage rate to the eventual pay off amount and everything in between. By keeping track of those numbers you have a better chance of securing a refinance that serves you.