Looking at refinancing, any tools?

6545 Views 14 Replies 9 Participants Last post by Sampson, May 7, 2009

KillerSquirrel

Discussion Starter · Apr 22, 2009

Hi all. I'm looking at refinancing my mortgage now that rates are a bit lower but I'm at a loss at how to really know for sure if its the right move for me. I've looked at mortgage calculators and have tried to compare my current amortization schedule to what a new mortgage would be like. Comparing how much more my principal goes down and how much less I pay in interest. Is this really the best I can do? I guess what I'm really asking is if there is a little tool somewhere out there that lets you enter in your current mortgage details, your new mortgage details, what the penalty is to refinance and click a button and it tells you yay or nay. That kind of thing.

Does that exist?

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FrugalTrader

· #2 · Apr 22, 2009

I'm not sure if this is what you're looking for, but a MDJ reader created a spreadsheet that compares fixed vs variable rate.

ethos1

· #3 · Apr 22, 2009

also provided by DAvid on another thread on these forums

http://www.canadianmoneyforum.com/showthread.php?t=113

"There are some handy spreadsheets at http://www.yorku.ca/amarshal/mortgage.htm you can use to see the difference small changes make to your mortgage.

There is also a wonderful set of tools at: http://www.dinkytown.net for both US and Canadian financial systems"

Sampson

· #4 · Apr 22, 2009 (Edited)

I think its a little more difficult to determine the 'best' scenario, and can not be simply summed up by a yes/no.

We are in the midst of renegotiating our mortgages, and have run many scenarios,

1) staying with existing lender, with reduced penalty.
2) leaving existing lender, with higher penalty.
3) stay with existing mortgage, and just maximize the prepayment amounts

a) then you must consider whether you can pay the penalty,
b) or will have to lump it into the new mortgage

i) then there is a choice of the actual product - variable, vs. fixed rate, prepayment options etc.

I think you also need to determine if paying the house down quickly is more important than monthly cash flow. You may plan to maintain your current payment (despite the reduced minimum), but may decide you prefer to do something else with the extra cash.

I've got an excel file now, but its extremely messy. Maybe if I have time, I'll clean it up and FT can ask me to write a guest post about it (you do pay well right?

)

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FrugalTrader

· #5 · Apr 22, 2009

Sampson said:
I've got an excel file now, but its extremely messy. Maybe if I have time, I'll clean it up and FT can ask me to write a guest post about it (you do pay well right? )

My guest writers are usually paid with pride in bettering the pf community.

If you are interested in guest posting, let me know and we'll discuss the details.

DAvid

· #6 · Apr 23, 2009

FrugalTrader said:
My guest writers are usually paid with pride in bettering the pf community.

\

Or the occasional coffee & donut!

KillerSquirrel

Discussion Starter · #7 · Apr 23, 2009

Thanks for the tips and sites. With this new mortgage I'm looking at increasing the payment, decrease the amortization period, and having it set up as a readvanceable mortgage/heloc so I can go for the SM later on.

Sampson

· #8 · Apr 23, 2009

Send me a PM with your email and I'll send you a copy of the amortization table I'm using.

You can copy a bunch of tabs with different scenarios and compare numerous things (like interest paid), balance at end of term etc. You can also input prepayment options, and bundle in the penalty to break if you need.

mhd

· #9 · Apr 24, 2009

The yeh or neh to refinancing with a click of a button site:

http://www.calculatorz.com/united/earlyrenew.cgi

Ben

· #10 · Apr 24, 2009

An excellent, Excel-based Canadian mortgage calculator.

http://www.vertex42.com/Calculators/Canadian-mortgage.html

The results always seem to be just a few pennies/dollars from the bank formula, but is excellent otherwise.

I also have another very simple spreadsheet that does mirror exactly the bank results, but it doesn't have all the bells and whistles (extra payments, etc). Given the standard parameters, it lists the declining value of your mortgage, by date, until it reaches $0 somewhere over the distant horizon. I find this a lot nicer than the "black-box" calculators online.

I also prefer to run scenarios on these sheets rather than trust the "Yeah or Nay, should you break" options available online.

Shayne

· #11 · Apr 28, 2009

PM me all the details of your mortgage and I can tell you if refinancing makes sense. I have developed a spreadsheet and I can do this quite quickly.

Phalene

· #12 · May 6, 2009

Our mortgage is with ING, and all we had to do was call them to get them to lower our interest rate- although it was only lowered to 5.16% (from 5.79), which is still kind of high. Still, there was no fee and no hassle.

Shayne

· #13 · May 7, 2009

Ing did a blend and extend for you likely for another 5 year term.

You have to do the math and see if things like that make more sense than breaking your current mortgage contract, paying the penalty and getting a brand new mortgage under 4%.

Shayne

· #14 · May 7, 2009

KillerSquirrel said:
Hi all. I'm looking at refinancing my mortgage now that rates are a bit lower but I'm at a loss at how to really know for sure if its the right move for me. I've looked at mortgage calculators and have tried to compare my current amortization schedule to what a new mortgage would be like. Comparing how much more my principal goes down and how much less I pay in interest. Is this really the best I can do? I guess what I'm really asking is if there is a little tool somewhere out there that lets you enter in your current mortgage details, your new mortgage details, what the penalty is to refinance and click a button and it tells you yay or nay. That kind of thing.

Does that exist?

It does exist on my computer.

I would be happy to run any scenarios for you. If you are interested email me at [email protected] I would share the calculator with you, but I am planning on enhancing it and marketing it to financial planners, mortgage brokers, etc.

Sampson

· #15 · May 7, 2009

MDJ just posted an article

Should you break your mortgage for a lower rate that includes an excel file that can be used to compare different mortgage rate scenarios.

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