Home loan refinance

[IamBhagatSingh]

Thank you brothers @Thokkalee @Anta Assamey @macha @chingchang for giving an idea on how amortization calculation works and links provided . appreciate it . i did some reading and found something interesting that refinance is actually very good. let me know if my understanding is correct . others feel free to chime in . 

For this example ,

1. input parameters ==> loan amount: 500k , loan term : 30 years , interest rate : 6 %

direct link to amortization calculator with above parameters  refer this : https://www.calculator.net/amortization-calculator.html?cloanamount=500000&cloanterm=30&cinterestrate=6&printit=0&x=21&y=37

In this lets say we are with one lender for 2 years beginning Jan 2023 . we would have paid balance of $487,341 .

So after 2 years ie on Jan 2025 , we owe 

principal : $2,436.71

interest : $561.04

2. Now we wanted to move to other lender ,and for apple to apple  comparison i am using same interest rate as previous one . 

Input parameters ==> loan amount : 487,314 ( previous lender balance) , loan term : 30-2years=28 years , interest rate : 6% 

direct link to amortization calculator with above parameters : https://www.calculator.net/amortization-calculator.html?cloanamount=487%2C341.18&cloanterm=28&cinterestrate=6&printit=0&x=75&y=17

Now if you see the the principal and interest is same as previous lender one . ie 

principal : $2,436.71

interest : $561.04

 

So irrespective of lender refinance , we end up paying the same principal and interest . So if this is the case ,how come the refinance is not beneficial . Help me understand . newbies like me and others will gain some knowledge on this . thanks . 

 

[lddaritho]

4 minutes ago, IamBhagatSingh said:

Thank you brothers @Thokkalee @Anta Assamey @macha @chingchang for giving an idea on how amortization calculation works and links provided . appreciate it . i did some reading and found something interesting that refinance is actually very good. let me know if my understanding is correct . others feel free to chime in . 

For this example ,

1. input parameters ==> loan amount: 500k , loan term : 30 years , interest rate : 6 %

direct link to amortization calculator with above parameters  refer this : https://www.calculator.net/amortization-calculator.html?cloanamount=500000&cloanterm=30&cinterestrate=6&printit=0&x=21&y=37

In this lets say we are with one lender for 2 years beginning Jan 2023 . we would have paid balance of $487,341 .

So after 2 years ie on Jan 2025 , we owe 

principal : $2,436.71

interest : $561.04

2. Now we wanted to move to other lender ,and for apple to apple  comparison i am using same interest rate as previous one . 

Input parameters ==> loan amount : 487,314 ( previous lender balance) , loan term : 30-2years=28 years , interest rate : 6% 

direct link to amortization calculator with above parameters : https://www.calculator.net/amortization-calculator.html?cloanamount=487%2C341.18&cloanterm=28&cinterestrate=6&printit=0&x=75&y=17

Now if you see the the principal and interest is same as previous lender one . ie 

principal : $2,436.71

interest : $561.04

 

So irrespective of lender refinance , we end up paying the same principal and interest . So if this is the case ,how come the refinance is not beneficial . Help me understand . newbies like me and others will gain some knowledge on this . thanks . 

 

Beggar 

[lddaritho]

5 minutes ago, IamBhagatSingh said:

Thank you brothers @Thokkalee @Anta Assamey @macha @chingchang for giving an idea on how amortization calculation works and links provided . appreciate it . i did some reading and found something interesting that refinance is actually very good. let me know if my understanding is correct . others feel free to chime in . 

For this example ,

1. input parameters ==> loan amount: 500k , loan term : 30 years , interest rate : 6 %

direct link to amortization calculator with above parameters  refer this : https://www.calculator.net/amortization-calculator.html?cloanamount=500000&cloanterm=30&cinterestrate=6&printit=0&x=21&y=37

In this lets say we are with one lender for 2 years beginning Jan 2023 . we would have paid balance of $487,341 .

So after 2 years ie on Jan 2025 , we owe 

principal : $2,436.71

interest : $561.04

2. Now we wanted to move to other lender ,and for apple to apple  comparison i am using same interest rate as previous one . 

Input parameters ==> loan amount : 487,314 ( previous lender balance) , loan term : 30-2years=28 years , interest rate : 6% 

direct link to amortization calculator with above parameters : https://www.calculator.net/amortization-calculator.html?cloanamount=487%2C341.18&cloanterm=28&cinterestrate=6&printit=0&x=75&y=17

Now if you see the the principal and interest is same as previous lender one . ie 

principal : $2,436.71

interest : $561.04

 

So irrespective of lender refinance , we end up paying the same principal and interest . So if this is the case ,how come the refinance is not beneficial . Help me understand . newbies like me and others will gain some knowledge on this . thanks . 

 

Beggar principal and interest not same all the time 

[IamBhagatSingh]

12 minutes ago, lddaritho said:

Beggar principal and interest not same all the time 

Orey item raja, ni English kuda ni fake posts lagane undi. Read correctly where did I say principal and interest as same. 

[Thokkalee]

1 hour ago, IamBhagatSingh said:

Thank you brothers @Thokkalee @Anta Assamey @macha @chingchang for giving an idea on how amortization calculation works and links provided . appreciate it . i did some reading and found something interesting that refinance is actually very good. let me know if my understanding is correct . others feel free to chime in . 

For this example ,

1. input parameters ==> loan amount: 500k , loan term : 30 years , interest rate : 6 %

direct link to amortization calculator with above parameters  refer this : https://www.calculator.net/amortization-calculator.html?cloanamount=500000&cloanterm=30&cinterestrate=6&printit=0&x=21&y=37

In this lets say we are with one lender for 2 years beginning Jan 2023 . we would have paid balance of $487,341 .

So after 2 years ie on Jan 2025 , we owe 

principal : $2,436.71

interest : $561.04

2. Now we wanted to move to other lender ,and for apple to apple  comparison i am using same interest rate as previous one . 

Input parameters ==> loan amount : 487,314 ( previous lender balance) , loan term : 30-2years=28 years , interest rate : 6% 

direct link to amortization calculator with above parameters : https://www.calculator.net/amortization-calculator.html?cloanamount=487%2C341.18&cloanterm=28&cinterestrate=6&printit=0&x=75&y=17

Now if you see the the principal and interest is same as previous lender one . ie 

principal : $2,436.71

interest : $561.04

So irrespective of lender refinance , we end up paying the same principal and interest . So if this is the case ,how come the refinance is not beneficial . Help me understand . newbies like me and others will gain some knowledge on this . thanks . 

Why will it change? You just changed the lender but didn’t change the loan conditions.. It will actually increase if you factor in the closing costs of the new loan.. 

[lddaritho]

2 hours ago, IamBhagatSingh said:

Orey item raja, ni English kuda ni fake posts lagane undi. Read correctly where did I say principal and interest as same. 

Beggar get out of this thread 

[chingchang]

10 hours ago, IamBhagatSingh said:

Thank you brothers @Thokkalee @Anta Assamey @macha @chingchang for giving an idea on how amortization calculation works and links provided . appreciate it . i did some reading and found something interesting that refinance is actually very good. let me know if my understanding is correct . others feel free to chime in . 

For this example ,

1. input parameters ==> loan amount: 500k , loan term : 30 years , interest rate : 6 %

direct link to amortization calculator with above parameters  refer this : https://www.calculator.net/amortization-calculator.html?cloanamount=500000&cloanterm=30&cinterestrate=6&printit=0&x=21&y=37

In this lets say we are with one lender for 2 years beginning Jan 2023 . we would have paid balance of $487,341 .

So after 2 years ie on Jan 2025 , we owe 

principal : $2,436.71

interest : $561.04

2. Now we wanted to move to other lender ,and for apple to apple  comparison i am using same interest rate as previous one . 

Input parameters ==> loan amount : 487,314 ( previous lender balance) , loan term : 30-2years=28 years , interest rate : 6% 

direct link to amortization calculator with above parameters : https://www.calculator.net/amortization-calculator.html?cloanamount=487%2C341.18&cloanterm=28&cinterestrate=6&printit=0&x=75&y=17

Now if you see the the principal and interest is same as previous lender one . ie 

principal : $2,436.71

interest : $561.04

 

So irrespective of lender refinance , we end up paying the same principal and interest . So if this is the case ,how come the refinance is not beneficial . Help me understand . newbies like me and others will gain some knowledge on this . thanks . 

 

Refi is not always beneficial ..  Mortgage loans are usually 10 / 15/20/30 years .. Do if you are doing a refi in 2 years and lets say you took 30 year loan again, you are basically extending your loan term by 2 more years. if the interest rates are lower in 2 years, it mkes more sense to refi but if the interest rates are same, you end up losing more money by refi. The mortage payment per month can be lower in that case because your total loan amount is less (487K) instead of 500K split into 30 years

You can save more money by either paying more money per month or year or by refinancing to a less term like 15 or 20 years. It all depends on your own situation 

 

 

 

[HugoStrange]

11 hours ago, IamBhagatSingh said:

Thank you brothers @Thokkalee @Anta Assamey @macha @chingchang for giving an idea on how amortization calculation works and links provided . appreciate it . i did some reading and found something interesting that refinance is actually very good. let me know if my understanding is correct . others feel free to chime in . 

For this example ,

1. input parameters ==> loan amount: 500k , loan term : 30 years , interest rate : 6 %

direct link to amortization calculator with above parameters  refer this : https://www.calculator.net/amortization-calculator.html?cloanamount=500000&cloanterm=30&cinterestrate=6&printit=0&x=21&y=37

In this lets say we are with one lender for 2 years beginning Jan 2023 . we would have paid balance of $487,341 .

So after 2 years ie on Jan 2025 , we owe 

principal : $2,436.71

interest : $561.04

2. Now we wanted to move to other lender ,and for apple to apple  comparison i am using same interest rate as previous one . 

Input parameters ==> loan amount : 487,314 ( previous lender balance) , loan term : 30-2years=28 years , interest rate : 6% 

direct link to amortization calculator with above parameters : https://www.calculator.net/amortization-calculator.html?cloanamount=487%2C341.18&cloanterm=28&cinterestrate=6&printit=0&x=75&y=17

Now if you see the the principal and interest is same as previous lender one . ie 

principal : $2,436.71

interest : $561.04

 

So irrespective of lender refinance , we end up paying the same principal and interest . So if this is the case ,how come the refinance is not beneficial . Help me understand . newbies like me and others will gain some knowledge on this . thanks . 

 

if its the same interest rate, why the F do u want to do refi?

Rule of thumb is if the interest rate is less by .5% then u refi within the first 5 years. 

[IamBhagatSingh]

9 hours ago, Thokkalee said:

Why will it change? You just changed the lender but didn’t change the loan conditions.. It will actually increase if you factor in the closing costs of the new loan.. 

 

59 minutes ago, chingchang said:

Refi is not always beneficial ..  Mortgage loans are usually 10 / 15/20/30 years .. Do if you are doing a refi in 2 years and lets say you took 30 year loan again, you are basically extending your loan term by 2 more years. if the interest rates are lower in 2 years, it mkes more sense to refi but if the interest rates are same, you end up losing more money by refi. The mortage payment per month can be lower in that case because your total loan amount is less (487K) instead of 500K split into 30 years

You can save more money by either paying more money per month or year or by refinancing to a less term like 15 or 20 years. It all depends on your own situation 

 

 

 

Thanks 

[IamBhagatSingh]

19 minutes ago, HugoStrange said:

if its the same interest rate, why the F do u want to do refi?

Rule of thumb is if the interest rate is less by .5% then u refi within the first 5 years. 

For better explanation, i took the example of same interest rate. Why the heck  someone will refinance for same interest rate 

[lddaritho]

11 minutes ago, IamBhagatSingh said:

For better explanation, i took the example of same interest rate. Why the heck  someone will refinance for same interest rate 

[HugoStrange]

33 minutes ago, IamBhagatSingh said:

For better explanation, i took the example of same interest rate. Why the heck  someone will refinance for same interest rate 

whats ur point then? 

[IamBhagatSingh]

1 minute ago, HugoStrange said:

whats ur point then? 

There was a misconception in earlier threads that if one refinance, they end up paying the same interest again with the new lender. This clarifies that it's not the case. 

[VendyHalwa]

1 hour ago, IamBhagatSingh said:

For better explanation, i took the example of same interest rate. Why the heck  someone will refinance for same interest rate 

ok