Zillow Mortgage Marketplace recently launched a unique Break-Even Point graph on every loan quote borrowers receive from lenders. This graph helps borrowers who want to refinance determine their “break-even” point, which is when they would start saving enough from a new loan to offset the costs of refinancing.
After anonymously submitting a refinance request, borrowers are presented with custom quotes from a network of thousands of lenders. When borrowers click on an individual quote to get more information, they can view this new graph which indicates how long they need to live in their home to offset the costs refinancing.
In addition, the graph shows the cumulative savings that would occur over the entire life of the loan. Borrowers can use the interactive feature to scroll across the graph to see the accumulated savings in each year.
On Zillow Mortgage Marketplace, the average borrower gets 24 quotes in 6 seconds. With the launch of this new feature, Zillow calculates and creates an interactive Break-Even Point graph on each refinance quote instantly, something that would be very difficult for borrowers to do manually.
Given the historically low mortgage rates we’ve seen this year, refinancing a mortgage is something that many homeowners are considering right now. This new graph helps borrowers quickly and easily compare the break-even point on all the refinance quotes they receive to determine which loans make the most financial sense for them.
If you are looking to refinance and want to try it out, submit a refinance loan request — anonymously — on Zillow Mortgage Marketplace.
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Comments
7 Comments so far
Matt Carter
So does this tool take into account the additional expense I will incur if I my new loan requires private mortgage insurance, and my existing loan did not?
Many people will be in this boat if they bought a home with 80 percent or lower LTV that did not require PMI, and their home’s value has since declined to the point that their LTV exceeds 80 percent. When they refinance, they may be required to take out PMI.
It gets tricky because you would also need to know whether their existing loan is guaranteed by Fannie or Freddie, because the Home Affordable Refinancing Program (HARP) allows refinancings of those loans up to 125 percent LTV without requiring additional PMI beyond what’s on the existing loan.
It would also be interesting to know if/how the tool analyzes ARM loans. Would you see more of an inverted V, with savings up front and then dipping back into the red? That would be interesting for people who don’t plan to be in their home for 30 years to see.
Matt Carter
Another complex situation to analyze: Can this tool tell me what my savings will be if I am refinancing a first lien loan with a piggyback second and no PMI into a single first-lien loan (that may require PMI)?
There were more than 3.2 million loans made with piggyback seconds from 2005-07 and now you can’t get them anymore.
Matt Carter
Does the tool take into account whether a loan carries a prepayment penalty or not?
Does the tool distinguish whether loan closing costs are rolled into the loan or if the borrower is paying cash? What assumptions are made about the cost of settlement services (title insurance, etc.)?
Keane Ng
Mary,
Is there a Zillow Calculator that also does this other than when clients submit requests on Marketplace?
Keane Ng
Mary,
Is there a Zillow Calculator that also does this other than when clients submit requests on Marketplace?
Mary Miller
We offer a basic refinance calculator http://www.zillow.com/mortgage/calculator/Should-I-refinance-my-home-mortgage.htm along with several others in the Mortgage Calculator section http://www.zillow.com/mortgage/calculator/Calculators.htm. However, to get the level of detail as shown above, we recommend that you take just a few minutes to complete a loan request to get the most accurate results.
Kevin McNichol
Mary
I can’t tell from the graph in the example. Does the calculator account for changes in value of the home?