Zero Point - Zero Cost Refinances

Mortgage and Lending with Augusta Financial, Inc. NMLS ID: 241368

Recently, the #1 question that I have been asked is, "Should I refinance my property while rates are low?" 

How can you tell if the benefits of the monthly savings out weigh the cost?  As I am fond of using actual figures to demonstrate my view point, please allow me to explain how to calculate the "real" savings.

For example, let's say you currently have loan in the amount of $400,000.00 at 6.5%.  Starting with this assumption, we can guesstimate the following based on today's rates:

1)     Current Loan = $400,000.00 @ 6.5% = $2,528.27/month

2)     New 0 Point - 0 Cost Loan = $404,000.00 @ 5.75% = $2,357.63/month
     a.      Monthly savings of $170.64
     b.      Return on investment = 23 months (about 2 years)

3)     New 1 Point - 0 Cost Loan = $408,000.00 @ 5.375% = $2,284.68/month
     a.      Monthly savings of $243.59
     b.      Return on investment = 33 months (about 2 ¾ years)

What does all of this mean?  If you still have equity in your house and you wish to lower your payment, doing a 0 cost refinance may be a viable option for you.  If your main concern is the monthly savings, you may even consider paying a point or two.

Feel free to contact me if you have specific questions or would like a further explanation.

For more information and FREE MORTGAGE ADVICE visit:


This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Almost Anything Goes
Dedicated Bloggers
zero point home loans
free home loans
0 point refinances
aaron reno
no cost refinance
free refinance

Spam prevention
Show All Comments
Find a Notary Public needAnotary
QEC Internet Services - Long Beach, CA

We have a calculator that can assist in helping you reach a decision as to if a refinance is in order.

You MUST look at the numbers.


Jun 05, 2008 05:38 PM #1
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?


Aaron Reno

VP of Development
Ask me a question

Additional Information