When you’re thinking about refinancing your current home to lower your monthly payment, you’ll likely have a lot of questions.
A lower monthly payment is typically achieved by refinancing into a lower interest rate, or a longer loan term. Refinancing this way can affect the amount of interest you pay, and potentially cost you money over the life of the loan, so it’s important to consider the total cost when refinancing.
The first thing you should do is discuss your homeownership goals with a Churchill Home Loan Specialist. This is where you’ll get an easy-to-understand cost breakdown with your budget in mind.
Pro Tip: A Homeownership Strategy Meeting is completely free through Churchill Mortgage!
To know whether refinancing is worth it, you need to take into account two things:
The quicker you recover your costs, the sooner your savings starts.
This also factors in how long you are going to stay in your home. If you plan to sell your home before you break even, you might want to stay in your original mortgage.
The Break-Even Point:
When the net savings from your new monthly payment covers the cost of refinancing (closing costs).
This calculator is being provided for educational purposes only. The results are estimates that are based on information you provided and may not reflect Churchill Mortgage Product terms. The information cannot be used by Churchill Mortgage to determine a customer's eligibility for a specific product or service. All financial calculators are provided by a third-party and are not controlled by or under the control of Churchill Mortgage. Churchill Mortgage is not responsible for the content, results, or the accuracy of information.
These calculations are hypothetical examples designed to for illustration purposes only. Consult a Home Loan Specialist for more specific information regarding payments, terms, etc.
As you begin the refinancing process, you’ll need to gather important documents that are commonly requested throughout the refinancing process.
Gather important documents that are commonly requested throughout the refinancing process.
Ask your Home Loan Specialist where and how you will submit your documents for review. Don't forget to confirm that documents have been received – you don’t want to delay your closing due to a missed email!
Because the interest rate on your home loan is directly tied to how much you pay on your overall mortgage, lower rates usually mean lower monthly payments.
Check out this example of monthly payments (principal and interest) on a 15-year fixed-rate loan of $250,000 at 5.5% and 4.0%.
With a 1.5% difference in interest rate, there was a $34, 827 difference in interest paid! Imagine what you could do with that in your pocket!
With so much of your hard-earned money on the line, it’s best to seek advice from a trusted home loan expert and have the confidence that you are in qualified hands.