- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Calculating Hidden Cost of Reamortization on a Refi
Posted on 12/17/20 at 10:31 am
Posted on 12/17/20 at 10:31 am
Is there an easy way to calculate this? I see amortization calcs online but it's just a table that requires alot of manual math. Is there an easier way?
Example- Refi will save $100 a month on the payment, but reamortizing means more than $100 will be going back to interest instead of principal, at least until amortization catches back up. The difference in money there.... that's what I'm looking to calculate easily without looking like Bob Cratchet in the corner by candlelight.
Example- Refi will save $100 a month on the payment, but reamortizing means more than $100 will be going back to interest instead of principal, at least until amortization catches back up. The difference in money there.... that's what I'm looking to calculate easily without looking like Bob Cratchet in the corner by candlelight.
4
Posted on 12/17/20 at 10:38 am to deeprig9
I need more info, i.e. current term, new term, current rate, new rate, current principle, new principle, closing costs etc.
Posted on 12/17/20 at 10:42 am to deeprig9
Try this one: LINK
You put in the numbers for the loans you want to compare, and it shows you the amortization schedule for both. You can see how much interest you've already paid on the existing loan to date, and then look at the new loan's schedule. Assuming you are adding the refinancing costs to the new loan, it should show you how much you've already sunk in old loan vs. new.
I just did this exact comparison about 2 months ago, and I determined that the reduction in interest rates wasn't sufficient, based on refinancing costs and what I'd already paid in interest on existing loan....I was better served putting the refinancing costs into the existing loan and adding more to the loan each month.
There are calculators with variable payment schedules that will show an amort schedule with regular or variable additional payments, so you can see exactly what's what.
You put in the numbers for the loans you want to compare, and it shows you the amortization schedule for both. You can see how much interest you've already paid on the existing loan to date, and then look at the new loan's schedule. Assuming you are adding the refinancing costs to the new loan, it should show you how much you've already sunk in old loan vs. new.
I just did this exact comparison about 2 months ago, and I determined that the reduction in interest rates wasn't sufficient, based on refinancing costs and what I'd already paid in interest on existing loan....I was better served putting the refinancing costs into the existing loan and adding more to the loan each month.
There are calculators with variable payment schedules that will show an amort schedule with regular or variable additional payments, so you can see exactly what's what.
Posted on 12/17/20 at 10:51 am to deeprig9
quote:
Example- Refi will save $100 a month on the payment, but reamortizing means more than $100 will be going back to interest instead of principal, at least until amortization catches back up. The difference in money there.... that's what I'm looking to calculate easily without looking like Bob Cratchet in the corner by candlelight.
Another thing that is often overlooked when going to shorter lengths (for increased payment) is what happens if you applied that same payment to the existing mortgage?
I made a spreadsheet that looks at it this way for very similar reasons. You can either feed me the info here or I can send it to you... @ gmail
Posted on 12/18/20 at 9:31 am to LSUtigerME
Hey can you send over that spreadsheet.
Cetiger07@gmail.com
Cetiger07@gmail.com
Posted on 12/18/20 at 9:43 am to deeprig9
My best guess would be to look at the principal and interest part of the payments on both loans. Multiply the current loan's P&I by how many months left on the existing loan. Then do the same for the P&I on the length of the refinance loan.
Posted on 12/18/20 at 2:21 pm to LSUtigerME
Original LA 189,150
Origination date 2/14/2017
Current value $240k
4.625% no MI
360mo
New offers coming in around the low 3's. I haven't pursued them. Full doc, low DTI, 800 scores. Appraisal shouldn't be an issue.
Spreadsheet me.
Posted on 12/18/20 at 2:23 pm to Tiger Prawn
quote:
My best guess would be to look at the principal and interest part of the payments on both loans. Multiply the current loan's P&I by how many months left on the existing loan. Then do the same for the P&I on the length of the refinance loan.
Long term maybe, but this isn't necessarily my forever house. Once my kid is out of the house in 13 or 14 years I don't see us staying here. So it's more of an equity play for me.
Posted on 12/18/20 at 2:33 pm to deeprig9
quote:
Original LA 189,150
Origination date 2/14/2017
Current value $240k
4.625% no MI
360mo
Are you refinancing 189K? Are there closing costs? Are you financing those as well?
Posted on 12/18/20 at 4:24 pm to ODP
LSUtigerME has the data he needs.
Posted on 12/18/20 at 4:38 pm to deeprig9
A little bit of information missing, but this should give you an idea.
I assumed minimum payments made on the current mortgage. This puts you owing about $177k today.
If you continued making the minimum payment on the new mortgage, you'd save ~$200/month. This would cost you a good bit in equity in the home over time (and the couple years of payments). However, you'd see about $30k savings in payments.
If instead you paid a little more to the new mortgage, you'd see a lot more savings as a result of the refi...still saving $100/month. You'd also maintain the equity value and ultimately pay off the mortgage sooner than the original.
Again, without the exact numbers to input I can't give you an exact answer.
ETA: Only thing missing would be current principal on mortgage and amount you're willing to pay to P&I (keeping in mind total payment including escrows). Also, I assumed "low 3s" to be 3.125 - 3.25 % with no points.
I assumed minimum payments made on the current mortgage. This puts you owing about $177k today.
If you continued making the minimum payment on the new mortgage, you'd save ~$200/month. This would cost you a good bit in equity in the home over time (and the couple years of payments). However, you'd see about $30k savings in payments.
If instead you paid a little more to the new mortgage, you'd see a lot more savings as a result of the refi...still saving $100/month. You'd also maintain the equity value and ultimately pay off the mortgage sooner than the original.
Again, without the exact numbers to input I can't give you an exact answer.
ETA: Only thing missing would be current principal on mortgage and amount you're willing to pay to P&I (keeping in mind total payment including escrows). Also, I assumed "low 3s" to be 3.125 - 3.25 % with no points.
This post was edited on 12/18/20 at 4:41 pm
Posted on 12/18/20 at 5:41 pm to LSUtigerME
Cool stuff, I appreciate it. Current balance is right there at 177k as you calculated.
Posted on 12/19/20 at 7:13 am to deeprig9
You have a 4.625 and most likely could refi to a very low 2% with no appraisal and you havent jumped on it?
Posted on 12/19/20 at 8:03 am to deeprig9
With the info you gave, your rate is 2.65% if you are in LA
This post was edited on 12/19/20 at 8:04 am
Posted on 12/19/20 at 8:58 am to WeAreBR
Buddy of mine got locked in at 2% for a 15 yr refi yesterday. If I’m currently at 3.125% for 20 yr and refinanced 7 months ago, would it be worth it to refinance again at 15 yr 2%?
Posted on 12/20/20 at 9:21 am to Uncle JackD
What is your value of the house, amt left on the mortgage and estimated credit score? Once I have that, I can get you a rate and then you can see if it is worth it to go to 15 year
Posted on 12/20/20 at 2:51 pm to WeAreBR
(no message)
This post was edited on 12/21/20 at 3:57 pm
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News