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D
E F I N I T I O N S
|
| Original mortgage
amount |
Original amount
of your mortgage. |
| Appraised value |
The appraised
value of your home when you purchased it. |
| Current term in
years |
Total length
of your current mortgage in years. |
| Years remaining |
Number of
years remaining on your current mortgage. |
| Income tax rate |
Your current
income tax rate. |
| Calculate balance |
To let the
calculator determine your remaining balance, based on your original loan
information and years remaining, check this box. To enter your own amount,
leave this box unchecked. |
| Current Appraised
value |
The current
appraised value of your home. |
| Loan balance |
Balance of
your mortgage that will be refinanced. |
| New interest rate |
The annual
interest rate for the new loan. |
| New term in years |
Number of
years for your new loan. |
| Loan origination
rate |
This is the
percentage of the new mortgage that is paid to the lender as the loan origination
fee. Typically this fee is 1% of the loan balance. |
| Other closing costs |
Estimate of
all other closing costs for this loan. This should include filing fees,
appraiser fees and any other misc. fees paid. |
| Points paid |
This is the
number of points paid to the lender to reduce the interest rate on the mortgage.
Each point costs 1% of the new loan amount. |
| Current payment |
Your current
payment is the sum of principal, interest and PMI. Because refinancing does
not affect your insurance or taxes they are not included here. |
| New payment |
Your new payment
is the sum of principal, interest and PMI. |
| Monthly PMI payment |
Monthly cost
of Principal Mortgage insurance (PMI). For loans secured with less than
20% down, PMI is estimated at 0.5% of your loan balance each year. Monthly
PMI is calculated by multiplying your starting loan balance by this percent
and dividing by 12. When your loan balance exceeds 20% of the original purchase
price, your PMI payment drops to zero. |
| Monthly PI payment |
Monthly principal
and interest payment. |
| Breakeven monthly
payment savings |
The number
of months it will take for your monthly payment reduction to be greater
than your closing costs. |
| Breakeven PMI &
interest savings |
The number
of months it will take for your interest and PMI savings to exceed your
and closing costs. |
| Breakeven total
savings after tax |
The number
of months it will take for your after tax interest and PMI savings to exceed
your closing costs. |
| Breakeven total
savings vs. prepayment |
This is the
most conservative breakeven measure. It is the number of months it will
take for your after tax interest and PMI savings to exceed both your closing
costs and any interest savings from prepaying your mortgage. The prepayment
amount used in this calculation is the amount that you would have to spend
on closing costs. |
