Conventional Refinance Mortgage Calculator

Closing costs are fees paid to the lender when closing on a loan. They are made up of expenses incurred to successfully underwrite the loan as well as fees to cover the costs of originating the loan. Closing costs can be paid up front or in some cases, can be rolled into the loan itself.

Depending on the loan, there may be costs beyond standard processing charges. Many lenders base loan-level price adjustments (LLPAs) on borrower eligibility or other loan features, like credit score, loan purpose, occupancy, number of units, etc. Other lenders use these same criteria to determine interest rate.

Other money due at closing can include prepaid amounts toward the establishment of a new escrow account, taxes, and money used to buy down an interest rate. When comparing loans, reviewing the closing costs and how they are to be paid is an important step in finding the right loan for your situation.

CapCenter's calculator shows you our fees, if any, side-by-side with the typical industry average fees. CapCenter is proud to offer many Zero Closing Costs options with low interest rates especially for primary home loans.

The interest rates published daily by banks represent an annual interest rate, which is the amount of total interest to be paid every year – you can use these numbers to calculate an annual percentage rate (APR). To determine how a rate affects your home loan, you will have to determine how that rate breaks out into monthly calculations.

While it is common to understand a lower interest rate as better than a higher one, this question is not always so straightforward. Loan costs are a huge factor when considering a home loan and often affect the overall APR, which negatively influences your total monthly payment. It can be more useful to understand the interest rate as a starting point.

Your mortgage payment will include principal, interest, taxes, and insurance, often referred to as PITI. Depending on your equity and/or loan program, you may also be required to pay mortgage insurance as part of your monthly payment. The loan amount, term, and interest rate determine what you owe toward principal and interest.

Taxes and insurances are typically collected monthly into an escrow account. This allows a mortgage company to pay those bills on your behalf when they come due.

The driving force behind most refinance transactions is monetary savings, but there may be different savings objectives within. It’s possible a homeowner wants to reduce the years left on their mortgage. While this may provide total interest savings, it also may result in a higher monthly mortgage payment. For others, a refinance is about reducing their monthly payment. It’s still possible to save on overall interest, but the increase in cash flow might be their primary objective.

Some homeowners will seek a cash-out loan and use their home’s equity to reduce higher-cost debts, such as credit cards, or to finance home-improvement projects that would otherwise be done with a high-interest personal loan or credit card . There are other reasons for a refinance that are not explicitly tied to financial savings, such as removing or adding someone to the title or the loan.

Since CapCenter covers all the traditional closing costs, our clients often return for even modest reductions in their interest rate. When a lender covers all the transactional costs of a mortgage, the real cost is NOT refinancing. The amount of time from app to close is not significant, so repeat transactions become easier.

Typically, when mortgage interest rates are on the rise, so too are other types of rates. Sometimes, it provides the perfect opportunity for homeowners to leverage their home’s equity to consolidate higher-rate debts and reduce their overall monthly expenses. It may also be the best option to pull equity out of the home to finance a costly home improvement project such as a roof or HVAC replacement. For these and other reasons, we tend to see an increased demand for cash-out refinances when interest rates rise.

A cash-out refinance is a refinance in which the homeowner accesses some of the equity in their home. The borrower will borrow more than what is owed on the home (principal balance) and receive a payment for the overage. Often, the cash received goes toward upgrading the home or paying off an equity line.

Qualification for a cash-out refinance is like qualification for a standard rate/term refinance. The loan officer will determine your creditworthiness, relying heavily on your credit history and your debt-to-income ratio (DTI). They can also calculate the loan to value for your home and advise the upper limit of possible cash out proceeds. Once a loan officer determines that you qualify for a loan, you will still be subject to a full approval process.

There are a few things to consider when thinking about a shorter-term mortgage...

Monthly payment – A shorter term mortgage may come with a lower interest rate, but it also comes with a shorter amortization period, potentially leaving you with higher payments than you have today. Ensure that you are comfortable with the monthly payment amount when reviewing options with your mortgage company.

Interest paid over the life of the loan – As mentioned, a shorter-term mortgage has a shorter amortization period and as such you will pay less in interest over the life of the loan. Work with your mortgage company to understand the difference in total interest paid between your current mortgage and one you are considering. The savings may be substantial.