Calculate the amortization schedule for your mortgage. This is the time it will take for your new interest rate to fully apply. Enter the amount of time needed for the new interest rate to equal the amortization, or the amount of payments still needed each month. The calculator will show you if the mortgage rates you are looking at are the current recommended interest rates. If they are not, go back to the beginning and add several more years to the amortization period. Then add another number to the amortization to reflect the extra amount you will pay for your mortgage, assuming that you were to refinance at the new mortgage rates.
Do your best to get a better idea of how much longer-term you would have to keep your mortgage. Enter the length of the term you want to maintain, from five years to 30 years, and the amount of interest you will pay over this duration. There are many ways to structure your mortgage so that you wind up paying less in total interest over a longer-term. With some of the special mortgage deals currently available, it may not make financial sense to refinance for a longer-term.
If you want to refinance for a shorter term, think about shortening the length of the loan. This is especially true if you plan to move within a few years. You can often reduce your payments and save money by refinancing for a shorter term. Talk with an independent mortgage broker to find out more about the advantages and disadvantages of short-term versus long-term fixed-rate mortgages.
The Bankrate Mortgage calculator allows you to compare an adjustable rate mortgage with a longer-term fixed-rate. Adjustable rate mortgages come with variable interest rates, which can vary up and down, depending on the United States federal budget and the state money market. With a longer-term loan term, your monthly payments become gradually lower over time, but the interest rate is reset higher at the start of each term. With a shorter loan term, the interest rate reset is higher, which can make monthly payments higher.
It is possible to find ways to make your monthly payments more affordable while still keeping the home you want. Refinancing can help you reduce your monthly payments while still keeping the home you want. Talk to an independent mortgage broker to find out more about how to make refinancing to the lowest fixed rate possible a reality. The sooner you get started, the better your chances of saving money and keeping the house you want. To learn more about saving money on interest and owning the home you want, register for a free mortgage guidebook using the links below.