In today’s age of globalization and booming economy, more and more people are taking loans. However, lending rates are volatile. Sometimes they drop and sometimes they rise. Therefore, refinancing has also emerged as a mortgage management option. However, before you decide to go for refinancing, you need to calculate the monetary benefits or losses that will occur after refinancing. Money Tools Refinancing Calculator is a tool present on some Web sites that help you to perform a ‘what-if-analysis’ on loan refinancing and helps you in making an informed decision.
On the Web site, it appears as a simple tool with lots of text boxes. These text boxes are grouped into three categories, namely, CURRENT LOAN, NEW LOAN, and SAVINGS. On the CURRENT LOAN category of text boxes, you specify the details of loan that you have currently taken with a lending organization. You specify your current balance, term of current loan in months, interest rate, and number of payments made. Money Toys Refinancing Calculator automatically calculates the payments remaining and monthly payment to be made. You can view these values in yellow-highlighted values.
On the NEW LOAN category of text boxes, you specify the details of new loan that you want to take from another or same lending organization. You specify the amount to be borrowed for new loan, term in months, interest rate, closing costs, and months until you plan to sell. After you are finished, Refinancing Calculator automatically fills the Monthly Payment yellow-highlighted text box.
Refinancing Calculator also automatically collects the positive or savings that will happen if you take a new loan. You can view savings in terms of monthly payment savings, total monthly payment savings, equity in old loan, equity in new loan, total equity savings, and total savings.