Definitions:
Refinance: The replacement (or paying off) of your current loan with a new loan under different loan terms. A common reason to refinance a loan is to secure a lower interest rate to save money over the life of the loan. Your cost savings and breakeven point are estimated by comparing the payments associated with your current loan to the payments you would make against a new loan, taking into account any costs and fees associated with refinancing your loan. Note: your savings and breakeven point are just estimates and may be higher or lower (longer or shorter) depending on additional factors including credit score, property location, property type, loan type, and the specific lender. It does not factor in costs associated with taxes, insurance, and dues.
Current Loan Amount: The amount of your loan initially borrowed from the lender. This does not factor in the amount of principal you have paid off to date.
Current Interest Rate: The interest charge on your current loan.
Current Loan Term: The period of time that constitutes the duration of your current loan agreement - the time in which you must pay off or refinance the loan.
Origination Date: The month and year in which your current loan started.
New Loan Amount: The amount you still owe on the principal of your current loan (excludes interest and other fees). It is based on your initial loan amount and the amount of principal you have paid off to date.
New Interest Rate: The interest charge on your new loan charged by the lender to reflect the lender's risk expressed as a percentage of the new loan you will take on. Visit "My Rates" to determine the best interest rate for you.
New Loan Term: The period of time that constitutes the duration of your new loan agreement - the time in which you must pay off or refinance the loan.
Refinancing Costs: The total cost and fees associated with refinancing your loan. It includes any exit fees charged by your current lender as a penalty for changing your current loan or lender before the end of your loan term, as well as any settlement costs associated with your new loan (could include a loan origination fee (or points), application fee, appraisal fee, attorney fee, origination fee, title search and insurance, etc.). Note: fees vary from lender to lender and are based on your personal information. It is important to understand the costs and fees associated with refinancing since it will help you determine whether or not you should refinance.
Roll Refinancing Costs Into New Loan: Lenders may give borrowers the option to "roll" the costs and fees associated with refinancing into the new loan amount. This allows borrowers to pay off the costs over the duration of the loan instead of up front at closing. Note: the total cost of your new loan will be higher and it may take longer to break-even due to the interest incurred on the refinancing costs.
Cash Out: Any additional cash you plan to borrow against your home's equity in excess of your current mortgage balance and loan settlement costs at the time of refinancing. Cash out may be used to pay off additional, non-mortgage expenses or to extract liquid cash from the equity in your home.
Monthly Savings: The amount you will save each month as a result of refinancing your loan. Your monthly savings is a comparison between the monthly payment on your current loan and the monthly payment on the new loan.
Total Savings (or Incurred): The total amount you will save (or incur) over the duration of the new loan term as a result of refinancing your loan. Your total savings takes into account the total amount you have left to pay on your current loan and compares it against the total amount you will pay on a new loan including any additional cash borrowed. It also accounts for any costs and fees associated with refinancing your loan.
Breakeven Point: The amount of time it will take from the start of your new loan term for your monthly cost savings associated with your new loan to cover any costs and fees associated with refinancing your current loan.