Home Value – Estimated Refinance Savings Disclosure | NerdWallet

By NerdWallet 

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The information below is related to the estimated savings for refinancing in the home value experience.

Updated: October 3, 2018

We may show you two types of refinance savings estimates: a Monthly Payment Reduction and a Total Cost Payment Reduction. The Monthly Payment Reduction is an estimated amount you could save per month based on difference between your existing mortgage interest rate and a mortgage with a lower interest rate. The Total Cost Payment Reduction represents the difference between the total amount of interest and fees you will pay over the remainder of your loan at your current interest rate versus what you might pay at a lower interest rate. Rates shown are based on “zero points”, and do not include up-front “discount points” (upfront costs a lender may charge to provide a lower interest rate) or “negative points” (lender credits toward closing costs in exchange for a higher interest rate).

In either case, the estimated refinance savings amount we show you is based on the difference in interest rates and known fees such as private mortgage insurance and lender origination fees only and does not include the following additional costs that may be added to your refinance loan:

• Possible changes to taxes, homeowner’s insurance or other amounts that may be part of your total monthly payment; • Payments made into escrow for taxes, assessments, homeowner’s insurance or other costs; • Periodic interest rate changes for adjustable rate mortgage (ARM) options; • Other up-front fees and closing costs that lenders may charge, which may include, for example, application fees, appraisal fees, and other (sometimes optional) expenses; and • The effect of lengthening the term of the loan.

Due to these additional costs that may be associated with refinancing your existing mortgage loan, it may take time before Monthly Payment Reductions result in actual savings. In some instances, the total cost of credit or Annual Percentage Rate (APR), may be higher than your current loan despite a lower monthly payment. The lowest monthly payment option may not be the best option for you. Be sure to evaluate your refinance options and examine the terms and conditions.

Your APR and total savings may vary. Not all consumers will qualify for rates and terms that result in an estimated refinance savings. Your eligibility for any specific loan terms depends on verification of information, your credit history, the location and type of property, and other factors as determined by lenders. NerdWallet does not guarantee that you will be able to obtain the Estimated Refinance Savings or that any lender will extend you credit. Interest rates are subject to change daily without notice.

NerdWallet does not take mortgage applications, originate, service, or make credit decisions in connection with loans, nor does it issue commitments or lock-in agreements. See your lender’s Terms for more information.