New Refinance Break-Even Point and Savings Graph
By: Mary Miller, Zillow Director Product Management, Mortgages | October 1, 2009
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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- Categories: Mortgages, Refinance
Comments
3 Comments so far
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Bob on October 1, 2009 11:31 am
That’s a great new innovation for real estate borrowers. Will recommend!
Scott Harward on October 1, 2009 9:53 pm
While this may be a good tool to determine the breakp point, it assumes that the borrower has the equity necessary to do a refi. It also does not take into account the borrowers credit score or occupancy type as well as the ability to qualify for the mortgage.
Cheryl Peck on October 2, 2009 2:11 pm
That’s a great tool! During my career as a mortgage broker, I saw many people rushing to refinance (some did it multiple times!) to drop the interest rate by a small amount. Since closing costs may be rolled into the loan on a refinance, some don’t even consider the cost of the loan. This a huge mistake! Look at the break even point along with how long you expect to stay in the house. A drop in interest rates don’t often justify a refinance! If you are considering refinancing, see my book, “Getting To Closing”, (www.CherylLPeck.com), which is a step by step guide to the application and closing process as well as money saving tips.