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March 19th, 2013

HSH.com releases two new prepayment calculators

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Mortgage and down paymentMortgage rates are at historic lows. Refinances are all the rage. We know.

But what if you can’t refinance? What if you don’t want to refinance? What if you already refinanced some time ago and mortgage rates have fallen since then? Even now with mortgage rates starting to trend upward, what can you do to capture a record-low rate, say 3.5 percent?

HSH.com has the answer for you: “PreFinance,” or a prepayment refinance.

Two new mortgage calculators

HSH.com has just released two new prepayment calculators that help homeowners achieve the savings of a refinance, but through prepayment.

“If you can’t refinance your mortgage but can afford to pay some additional money each month, that prepayment might save you as much as an actual refinance,” Keith Gumbinger, vice president of HSH.com, said in a release. “It’s technical, but by prepaying the loan principal just a little each month, borrowers lower their effective interest rate and can create savings equivalent to those possible with an actual refinance.”

PreFi prepayment calculator

Since it’s tax time, let’s say you just got a nice return back from the federal government. What should you do with that money? HSH.com’s PreFi calculator is designed for homeowners who have a specific dollar amount in mind that they can contribute to prepaying each month.

“The PreFi calculator allows users to input the additional amount they can send in each month with their regular mortgage payment and it will report the effective interest rate a borrower can achieve with that extra payment, their total interest savings and more,” said Gumbinger.

The PreFi calculator is a great tool for those for have already refinanced,  homeowners will small loan amounts or those who can’t qualify for a refinance for one reason or another.

LowerRate prepayment calculator

HSH.com’s second new prepayment calculator, the LowerRate prepayment calculator, allows homeowners to enter in a specific interest rate they would like to achieve and the calculator will produce a specific dollar amount you will need to prepay each month to achieve that effective rate.

“Let’s say a borrower refinanced their mortgage down to 4 percent early last year. Rates have since fallen to 3.5 percent, but a half-point break is too small to want to incur all the costs and hassle of refinancing again. Plug the 3.5 percent into the LowerRate calculator to find out exactly how much additional money they’ll need to pay each month to achieve that lower interest rate as if they did refinance!” said Gumbinger.

Sure, simply refinancing to a lower rate puts dollars back in your pocket, but unless you’ve reduced your loan term or kept it about the same, your long-term costs could far outweigh the cash you’re saving each month with a lower monthly payment.

These two new calculators essentially allow you to achieve the savings of a refinance without the hassle.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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