Government-backed VA loans make buying a home more affordable for veterans and active duty military personnel. You can also refinance a VA loan to take advantage of lower interest rates or get better terms. Our VA refinance calculator can help you estimate how much you might save by refinancing.
Keep in mind that a Refinance Calculator provides an estimate of how much you can save with a refinance. For example, the calculator does not display whether or not you will save money over the life of your loan. Also, the calculator does not take into account other aspects of your financial situation, such as the benefits of refinancing to get cash out to pay off high-interest credit card debt.
To get a personalized refinance review, contact one of our home loan advisors who can answer your questions and provide you financing options.
How much can you save with a VA refinance?
To see how much you may be able to save with a VA refinance, simply enter your information in the fields. Below describes how the VA refinance calculator works.
The current loan section looks at your current VA loan to better estimate how much you might save by refinancing. The calculator needs to know your original loan amount, loan term (which is the number of years you have to pay back the loan), how many years you have already been paying, and interest rate. It will also ask if there is a balloon payment. When you are finished with these inputs, move onto the “New Loan” section.
In this section, you will input details about the new mortgage you are looking to get. The new term and new interest rate will affect how much your new loan might cost. Note that the term of a new mortgage can have an impact on how much you might pay each month and how much money you might pay in interest over the life of the loan. Here you can input different values for the term and interest to see how the numbers change.
There are also default amounts for closing costs like origination charges, discount points, and other services. You can adjust these values based on your own loan. When you refinance, you pay off your current mortgage and replace it with a new one which may include closing costs.
The current appraised value of your home (also called its “fair market value”) can help you determine if it’s the right time to refinance. An appraiser will look at recent sales of comparable homes as well as how much it would cost to replace your home to come up with an appraised value. You should also consider the number of years you expect to live in your home. The longer you stay in your home, the more potential interest savings you might realize. Once you enter this information, the last section to complete is “Taxes & Insurance.”
Taxes & Insurance
The final step in the calculator is to enter how much you pay in property taxes and homeowners insurance each year. The values are already defaulted but can be adjusted based on your tax and savings rate. These costs typically are rolled into a homeowner’s monthly mortgage bill, so this information will help estimate the total payment amount you can expect.
This VA refinance calculator can help you decide when it might make sense to refinance your VA loan. You can call Freedom Mortgage today at 877-220-5533 to see if you can save by refinancing.
VA refinance calculator terms
In the VA refinance calculator, there are terms that may not be familiar. The information below may help you better understand the results of your calculations.
This is the process of paying back the loan by making regular principal and interest payments throughout the term of your loan. Amortization represents the gradual reduction of the principal balance of the loan over time. You can see estimated schedules by clicking
Amortization on the slider then selecting the
SEE TABLE buttons.
This represents how long you have before a balloon payment, if you have that type of loan. These are often short-term loans where payments may be lower before the balloon payment is due. Then there is a larger than usual one-time payment at the end of the loan term.
This is a calculation that shows when the savings from a refinance are equal to the closing costs. Our calculator estimates how much time it might take you to break even based on the numbers you input. The image below shows where you can find information on the estimated break even point.
Discount points are fees paid to the lender upfront in exchange for a lower interest rate. One point equals 1% of your loan amount. If you plan to stay longer in your home, points can help you save on interest over the life of the loan.
How much it costs to borrow money, expressed as a percentage. The interest rate lenders might offer are influenced by things like your credit score, finances, and loan amount.
Lenders and brokers may charge fees to process a loan. These are frequently called
origination charges and can be one of your closing costs.
Other settlement services
Any service connected with a real estate settlement. This could include a title search and title insurance, appraisal, credit report, and other services that are needed to refinance your home. Most of these service charges can be included in the closing costs of your refinance.
Monthly mortgage bills usually include principal and interest payments as well as payments for your property taxes and homeowners insurance. The calculator estimates your current and new monthly payments. Click the “plus box” to see estimates of the total interest you might pay too.
The number of years you have to pay back the money you borrow is called the loan
30 year mortgage means you have 30 years to pay off the loan. The term of a mortgage can affect your monthly payments and how much you might pay in interest over the life of the loan.
When should you refinance a VA mortgage?
People often refinance their VA loans to reduce their monthly mortgage payments or save money on interest. When interest rates are falling, it can be a good time to check whether you can save enough to make refinancing worthwhile.
People with an existing VA loan may be able to refinance using the Streamline process (which is also called an
Interest Rate Reduction Refinance Loan). VA Streamlines let people who qualify refinance with minimal paperwork and fewer documentation requirements. You may be able to roll closing costs into the new loan amount, which can reduce the amount of funds you need to bring to closing.
How does a VA cash out refinance work?
A VA cash out refinance allows you to refinance your home for more than you owe and take out the difference in cash. You need to have a certain amount of home equity to qualify for a cash out refinance. With the extra money, you can pay bills, pay for home improvements or college educations, or pay down other higher interest debts.
Would you like to learn more about refinancing your VA loan? Get Started today or call 877-220-5533.
Get started today by getting a personalized evaluation of your home loan options from Freedom Mortgage.