And it ALWAYS makes sense to refi IF…
‘The overall savings far exceeds any fees financed’. Black Ink Mortgage specializes in structuring loans that make sense. Find out if rates have dipped enough to offer you a sensible loan that saves you tens of thousands of dollars, call us today.
The Power of a Quarter of a Percent
by Doug Dahl – Broker/Mortgage Financial Specialist
It always makes sense and is advisable to refinance when you are able to lower your rate and the savings exceeds the cost of refinancing. And sometimes there are no fees.
Simple Mortgage Math Solved
Let’s say your loan started at $425,000 and your interest rate is fixed at 4.25%
Your principle and interest payment would be $2,090.74
3 ½ years into the loan the balance would be about $398,500*
You would have 318 months (26.50 years) remaining for a Grand Total of $664,855
*assumes no additional principle payments had been applied.
Your New Loan
New loan (rounded up): $400,000
New Rate: 3.99%
New Principle and Interest Payment $1,907.36
That’s a payment reduction of $183.38, right?
Here’s where most get lost..
While it is true that the new loan is amortized over 30 years, if you were to simply apply your current payment amount to the new loan, it would be paid off in
305 months (25.42 years) for a Grand Total of $637,675
‘The new loan thus would be paid off over 1 year sooner with a significant savings of over $27,180’
That’s as easy as I can put it. If you don’t agree with the math or have additional questions, I am more than happy to go over this more in depth. If we can
save you tens of thousands and you like the terms, we can lock a rate on the spot.
“At Black Ink Mortgage, we make loans that are profitable”
Doug Dahl | Broker & Owner