So what rate would you need before refinancing makes sense? That's what this
worksheet is designed to tell you. One thing to keep in mind, though: The
interest rate isn't the only thing to consider when shopping for a new loan.
Refinancing, after all, isn't free. There are the bank fees, the bills for a new
appraisal and inspection, your lawyer's fee — you name it. This worksheet will
help you figure out how much you'll save on your monthly payments with a lower
rate and how long it will take, given those savings, to repay the cost of
getting a new loan.
WHICH TYPE OF LOAN
is best? That depends several factors: how long you
plan to stay in your home, your interest-rate outlook, your budget, and your
tolerance for risk.
Adjustable-rate mortgages are initially cheaper than fixed-rate loans. And
they can be a good deal if you know you're going to stay in your home for a
relatively short period of time. But you run the very real risk that interest
rates could rise sharply and drive up your monthly payments. Fixed-loans, on the
other hand, cost more but offer no surprises. And for many, that comfort is
worth the added price.
To figure out which is best, you've got to consider both your best and your
worst-case scenarios. Our worksheet can help. Just fill in your numbers and then
use the graph and "compare" feature to evaluate your fixed and adjustable
options based on the total amount of interest paid as well as the amounts of
your first and last payments.
Mortgage (and other
loan) qualification is increasingly being done by means of "credit scoring."
This is a mathematical analysis which considers many different aspects of your
credit history -- late payments, delinquencies, tax liens, etc -- and expresses
it as a single number, or "grade."
calculator will "score" your credit using the number of late payments you have
on various credit accounts. This isn't a true "credit score," but will give you
a pretty good idea of how you'd fare. Please note that different lenders
may count late payments older than 12 months against you; ours doesn't. And
different lenders may assign you a higher or lower score, depending on their
internal underwriting requirements.
Simply make your selections from the dropdown boxes in the table below. Your
credit grade will be automatically upgraded whenever a selection is