Refinance

Really should I refinance my property finance loan?





Right here I demonstrate you the appropriate way to compute the rewards from refinancing a property finance loan. It is NOT how significantly you payment will go down! You also have to appear at the increase in the total going towards principal. The calculations I demonstrate are a bit simplified compared to the Actual approach of calculating matters, but I did it this way to make it ore obtainable. If you would like a additional detailed therapy, just permit me know!

12 comments

  1. I think the video is misleading (actually incorrect). The savings calculated by subtracting interests from two rates will not stay the same at all times. At some point, the payment with higher rate will pay off even more principal than that from the payment with lower rate. The "bank" way for calculating savings by subtracting payments is the correct way.

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  2. Excel and other TVM calculators put in a negative amount to show as money leaving your pocket. Money going in (the bank side) would be positive. Same thing for present and future values.

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  3. I don't understand something…..if the only difference between the two loans is interest rate…how is it possible that the savings on interest per month is greater than the total savings……

    the only way that would be possible, is if the loan term for loan B is shorter than loan A…..therefore paying more per month….

    can you explain where/if I'm going wrong here?

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  4. hello i would like to get some advice on what the best way to search for some one or some tools to refinance. I have a 30 year mortgage at 6.75 fix rate. I am in my 16 year and owe about 45K so i thinking i have another 14 years left. I have a HELOC with chase that i owe about 37k at variable rate of 3.75% Should i combine this accounts should i leave them alone if you have any ideas or web page that you can advice on or what type of person advice on this type of problems Banks,Mortgage broker, financial adviser thanks

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  5. count in the new inflation target by the federal reserve board of governors of 3% andddddd its gone, next customer in line please.

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  6. Thank you sir. this was really helpful.

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  7. You're not accounting for loan amortization and its effect on the incremental benefit you continually say you're trying to demonstrate – you're using excel, so you can absolutely demonstrate the incremental benefit easily using more appropriate math that inherently accounts for the change in BOTH interest and principal, per period for X years…a far better way to show…and you account for time value of money given we're dealing with monthly compounding here in loan math. You say there's an incorrect way to look at this, and you're largely right to some degree…so your correct example needs to show the incremental change correctly and it does not. And the "proof" element should be really straight forward – this is math, specifically loan amortization – it is either true and correct, or it's not, and all you need to do is demonstrate a more appropriate incremental comparison that accounts for the fundamental effect of amortization. It's clean, simple, and more accurate.

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  8. Your comparison of interest savings does not correctly demonstrate actual annual savings given effect of amortization. You need to demonstrate the change relative to each financing scenario 's respective amort schedule because interest savings are not derived as you have shown them. You merely spoke to this but did not prove it. This is a simple financing decision borne from an advantageous change in rates or credit strength relative to the inherent cost for title and loan settlement / origination.

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  9. With little experience with Excel, now I can make my own payment calculator. This learning broke down principal, interest very clearly and made this learning as clear as possible.

    Thank you academy. Thanks to the person who made this video.

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  10. One major thing to consider is your break-even period. If you plan on leaving your home in a few years, then a refinance would be a bad idea. Nice video, BurkeyAcademy.
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  11. Why doesnt everyone refinance as often as possible? If the bank was able to get you to sign an agreement to pay a higher rate what incentive do they have to lower that? I mean they're not cutting you a break out of the kindness of their hearts..

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  12. Shouldn't your "Current" Payment calculation use the full 360 months instead of the 288?  Seems to me that using the 288 distorts your true current payment.

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