{"id":79,"date":"2013-05-15T21:47:17","date_gmt":"2013-05-15T21:47:17","guid":{"rendered":"http:\/\/cp1.cpasitesolutions.com\/~reicinpo\/wordpress\/?p=79"},"modified":"2013-05-15T21:47:17","modified_gmt":"2013-05-15T21:47:17","slug":"brp-guest-blog-achieving-your-savings-goals-in-refinancing","status":"publish","type":"post","link":"https:\/\/bronswick.com\/2021\/2013\/05\/15\/brp-guest-blog-achieving-your-savings-goals-in-refinancing\/","title":{"rendered":"BRP Guest Blog – Achieving Your Savings Goals in Refinancing"},"content":{"rendered":"

May 15, 2013<\/strong><\/p>\n

BRP Guest Blog<\/span><\/p>\n

\n

Intro by Jeff Bronswick, Managing Partner of Bronswick Reicin Pollack:<\/em><\/p>\n

Friends \u2013<\/em><\/p>\n

I recently refinanced my home mortgage and thought it would be beneficial for all to hear the math behind refinancing.\u00a0 No matter if your goal is to save in the short-term or long-term, there are mortgage options out there that really make sense.\u00a0<\/em><\/p>\n

Steve Smith is a friend of BRP\u2019s and is very knowledgeable in the mortgage lending industry.\u00a0 I want to say thank you to Steve for offering his expertise to us and our clients.<\/em><\/p>\n

Sincerely,<\/em><\/p>\n

Jeff Bronswick<\/em>
\nAchieving Your Savings Goals in Refinancing<\/span><\/strong><\/p>\n

As interest rates continue to remain low, chances are you have already refinanced your mortgage, or at least thought about it.\u00a0 But when is the best time to refinance and what is the best way to go about it?\u00a0 I often hear comments like, \u201cthe rates only dropped a quarter\u201d or \u201cI don\u2019t want to go back to a new 30 year fixed because I only have 27 years left.\u201d\u00a0 To answer the when, why, and how is not determined solely by interest rates, but more importantly the MATH involved in your total payments.<\/p>\n

For example take a $300,000 first mortgage.\u00a0 Original terms are a 30 year fixed with a note rate of 4.5%.\u00a0 The principal and interest payments of this loan are $1,520.06.\u00a0 If a borrower were 2 years into this loan and had paid only the minimum required towards the principal balance, the remaining principal balance would be $289,666.12.\u00a0 What should the new loan amount be?\u00a0 How much better does the rate need to be for me to save money?\u00a0 The strategy for structuring the loan will always depend on the overall goal for the borrower.\u00a0 Is the goal to save the most money over the life of the loan or save the most money per month, a cash-flow focused refinance?<\/p>\n

For most borrowers the goal of a refinance is to save the most amount of total money over a given period of time.\u00a0 That may or may not be the actual life of the loan, depending on if they feel they will refinance or sell and pay off the original loan in less time than the original loan term.\u00a0 Others will choose the lowest rates and longest amortization term, therefore having the lowest payments.<\/p>\n

So here is the MATH:<\/p>\n

Depending on the loan product chosen, fixed rate, adjustable rate, with or without fees the rates can be drastically different.\u00a0 I will give an example of fixed rates below.<\/em><\/p>\n

Save money monthly.\u00a0 New loan amount $289,666.\u00a0 30 year fixed at 4%.\u00a0 Principal and interest payment $1,382.91.\u00a0 Monthly savings $137.15.\u00a0 Lifetime savings over the next 30 years is calculated the following way. Original loan had 360 total payments, but now you are 24 payments into the loan.\u00a0 Therefore total payments for the current loan are 336 x $1,520.06 = $510,740.16.\u00a0 For the new loan the total payments are calculated as 360 x $1,382.91 = $497,847.60.\u00a0 Total lifetime savings $12,892.56.<\/p>\n

Save money over the life of the loan.\u00a0 New loan amount $289,666.\u00a0 30 year fixed at 4%.\u00a0 Principal and interest minimum payment $1,382.91.\u00a0 In this case we are not going to change cash flows, so we will calculate based on the original principal and interest payment of $1,520.06.\u00a0 Monthly savings = $0.\u00a0 Lifetime savings are calculated based on a new shorter term payoff given the added principal payments each month.\u00a0 For this example the loan will be paid off in 303 payments.\u00a0 Therefore, the total lifetime payments are calculated as 303 x $1,520.06 = $460,578.18.\u00a0 Total lifetime savings $50,161.98.<\/p>\n

There are many ways to approach your home financing and no loan scenario is the same.\u00a0 As the cost of borrowing money remains low, each of us, as home owners must make the choice.\u00a0 Do I want to save money each month or can I capitalize on low rates and make my money work harder for me compared to my current loan?\u00a0 And of course, would my CPA approve\u2026<\/p>\n<\/div>\n

Steve Smith<\/p>\n

Vice President of Mortgage Lending<\/p>\n

steve.smith@guaranteedrate.com<\/a><\/p>\n

www.guaranteedrate.com\/stevesmith<\/a><\/p>\n

o: 773.290.0480 – m: 773.851.1793 – f: 773.516.6740<\/p>\n

Guaranteed Rate Inc<\/p>\n

3940 North Ravenswood , Chicago, IL 60613 NMLS ID: 217419<\/p>\n

IL – 031.0025979<\/p>\n

\"""\"<\/p>\n

The information contained in this Blog (the “Blog”) is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, and the inherent hazards of electronic communication, there may be delays, omissions or inaccuracies in information contained in this Blog. Accordingly, the information on this Blog is provided with the understanding that the authors and publishers are not herein engaged in rendering legal, accounting, tax, or other professional advice or services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser.<\/em><\/p>\n

While we have made every attempt to ensure that the information contained in this Blog has been obtained from reliable sources,\u00a0Bronswick Reicin Pollack, Ltd. (BRP)\u00a0is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this Blog is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Nothing herein shall to any extent substitute for the independent investigations and the sound technical and business judgment of the reader. In no event will BRP, or its partners, employees or agents, be liable to you or anyone else for any decision made or action taken in reliance on the information in this Blog or for any consequential, special or similar damages, even if advised of the possibility of such damages.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

May 15, 2013 BRP Guest Blog Intro by Jeff Bronswick, Managing Partner of Bronswick Reicin Pollack: Friends \u2013 I recently refinanced my home mortgage and thought it would be beneficial for all to hear the math behind refinancing.\u00a0 No matter if your goal is to save in the short-term or long-term, there are mortgage options […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[5],"tags":[],"class_list":["post-79","post","type-post","status-publish","format-standard","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/bronswick.com\/2021\/wp-json\/wp\/v2\/posts\/79","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bronswick.com\/2021\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bronswick.com\/2021\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bronswick.com\/2021\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/bronswick.com\/2021\/wp-json\/wp\/v2\/comments?post=79"}],"version-history":[{"count":0,"href":"https:\/\/bronswick.com\/2021\/wp-json\/wp\/v2\/posts\/79\/revisions"}],"wp:attachment":[{"href":"https:\/\/bronswick.com\/2021\/wp-json\/wp\/v2\/media?parent=79"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bronswick.com\/2021\/wp-json\/wp\/v2\/categories?post=79"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bronswick.com\/2021\/wp-json\/wp\/v2\/tags?post=79"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}