- 1). Call your mortgage holder to ask for your current pay-off balance. Let's use $100,000 as an example.
- 2). Add any equity that you plan to take out of your home to the pay-off balance to get the total loan amount. For instance, if your home is worth $150,000 (appraised value) compared to your $100,000 pay-off balance, you have $50,000 in equity. Let's say you want to take $10,000 cash out of your home. The total new principal amount of the refinanced loan in our example is $110,000.
- 3). Ask your prospective lender for the interest rate if you decide to pay points as well as the number of points that you would have to pay (usually one or two). You also need the length of this new loan in years. For this example, use a 7 percent interest rate, one point, and a standard 30-year fixed loan term.
- 4). Run your figures through the mortgage calculator at Bankrate.com (see "Resources" for the direct link) to get your monthly payment.
- 5). Multiply your new principal balance by 1 percent to get the number of points that you will pay at closing. In this example, it will be $110,000 times .01 (one percent) which equals $1,100.
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