Question:

What will my mortgage payment be if I refinance to $170,000 with $20,000 cash-out to 6.25% and 1% drop in the rate; property value is $400,000?

Answer:

What your mortgage payment will be after a refinance will depend on the new loan terms. A refinance is replacing an existing mortgage with another one. A refinance with cash-out means you will get cash from the transaction. Usually, a cash-out refinance is available at more restrictive terms than non cash out refinance transaction.

So you want to refinance to 1% lower rate and the term remains the same - 20 years.

Long time ago, refinances were recommended when rates would drop by 2%. Right now, refinancing is worth it as mortgage rates are at a historical low and it might be possible to refinance to 1% lower rate.

If you are currently having a balance of $150,000 at 7.25% and 38% Loan To Value ratio, your principal and interest mortgage payment is $1,185.56. If you refinance to 6.25% with $20,000 cash out the LTV will be 43% and your principal and interest mortgage payment will be $1,242.58.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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