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  Scott  Rheinhart
Wintrust Mortgage
601 Carlson Parkway
Suite 1550
Minnetonka
MN
55305
612-281-9990
srheinhart@wintrustmortgage.com
scott.rheinhart@gmail.com
 

"Cash In" Refinance
Analyze the value & rate of return on costs and total cash used by refinancing with a principal reduction
Analysis Prepared for
Subject Property
Current Property Value
Expenses   Annual   Monthly
R.E. Taxes
   
Insurance
   
Monthly Fee
   
Total Expenses    
STEP 1 - ENTER EXISTING LOAN INFO
In order to properly analyze the potential benefit, it's important to first have accurate information for your existing financing
Enter Current Loan Information below:
Enter the Original Loan Amount
Enter the Current Interest Rate
Enter the Original Loan Term in Years
Loan Payment (click box if IO)
 
2nd Loan
   
 
 
Totals
Calculate Balance and Remaining Term
Current Month and Year
Starting Month and Year
Number of Years and Payments Paid
Principal Paid to date
Calculated Balance or Enter Actual
Loan to Value of Remaining Balance
Extra Payments to Principal
Total Payment with Extra to Principal
Remaining Term/Number of Payments
 
 
 
 
Mortgage Insurance (MI or PMI)
Cost Factor and Monthly Payment
Total Monthly Payment w/ MI/PMI
 
Number of years MI will Continue
 
 
 
Total Current Payments
1st
 
2nd
 
Grand Total Payment w/Expenses
 
STEP 2 - ENTER FINANCIAL FACTORS & NUMBER OF YEARS TO ANALYZE
Adjust Financial Factors - Enter directly or use sliders to adjust
Marginal Tax Bracket
 
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0 65%
 
Rate of Appreciation
 
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0 20%
 
Investment Rate of Return
 
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0 20%
 
Tax Rate for Investment Gains
 
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0 65%
 
Number of Years to Analyze for
 
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0 40
 
STEP 3 - SET UP NEW LOAN OPTIONS
Current Loan Data and Categories Click to show or hide loan options and enter new loan info:
Original Loan Balance on Current
 
Total Current Loan Balance(s)
 
New Loan to Value Equals
 
 
OPTION 1
 
OPTION 2
 
OPTION 3
 
OPTION 4
Principal Reduction to be Made
 
Click if a penalty applies
 
Enter the penalty factor if applicable
 
 
 
 
 
New Loan Amount Equals  
 
 
 
 
Loan Term
 
Interest Rate
 
Discount Points
 
Check box for Interest Only Loan
 
 
 
 
 
Loan Payment
 
 
 
 
 
Mortgage Insurance Factor (MI/PMI)
 
Monthly MI/PMI Cost
 
Upfront or Single Premium MI/PMI
 
Years of Continuance for MI/PMI
 
 
 
 
 
2nd Loan Payment  
 
Total Payment Comparisons
Total Monthly Payment w/ MI/PMI  
 
 
 
 
Total Monthly Expenses  
 
 
 
 
Total Monthly Payment w/ Expenses  
 
 
 
 
Monthly Payment Savings
 
 
 
 
 
Total Payment Savings over Years Selected
 
 
 
 
PRE-PAYMENT OPTIONS
Using your savings as a pre-payment towards principal will change the results. It's not always the best place to invest your savings, yet, the impact of rapidly accelerating the reduction of your principal balance along with minimizing the amount of interest that you pay can be the most comfortable option for some. Click the box to add your full monthly savings or enter any number you like and you will then see here how the term of the loan will be shortened and in the bottom line results, how the total benefit of your refinance can increase.
Payment Savings without Pre-Payment
 
Click the box to use the full Payment Savings
   
Or, you can enter any other amount here
 
Remaining Payment Savings after Pre-Payment
 
New Loan Term in Years equals
 
 
 
 
 
Grand Total Payment
 
 
 
 
 
STEP 4 - CALCULATE CLOSING COSTS
Calculate Loan Option Closing Costs  
Discount Points
 
Cost of Discount Points
 
Single Premium or UFMIP Factor
 
Cost of Single Premium or UFMIP
 
Approximate Closing Cost Factor
 
Approximate Closing Costs equal
 
Other Costs
 
Other Costs Equal
 
Lender Credit
 
 
OPTION 1
 
OPTION 2
 
OPTION 3
 
OPTION 4
Total Closing Costs
 
 
 
 
 
Penalty Factor on Withdrawal  
 
 
 
 
Total Penalty on Withdrawal
 
+
 
 
 
Total Costs & Penalty on Withdrawal
 
=
 
 
 
Rate of Return on Total Costs
 
 
 
 
Average Annual Return on Total Costs
 
 
 
 
Click Icon to open a graph  
 
APR / Annual Percentage Rate
APR is the total cost of the loan expressed as an interest rate. It is NOT the actual interest rate that you pay.
Total Closing Costs  
 
 
 
Total Cost of MI/PMI
 
Per Diem Interest @
    Days
 
 
 
 
Total Cost Used for APR Calculation
 
 
 
 
 
1st Loan Annual Percentage Rate / APR =
 
 
 
 
 
TOTAL CASH USED & CASH TO CLOSE
Total Costs & Penalty on Withdrawal
 
 
 
 
Principal Reduction
 
+
 
 
 
Total Cash Used
 
=
 
 
 
Per Diem or Pre-Paid Interest
 
 
 
 
 
Months of Expenses to Escrow
 
 
 
 
 
Total Cash to Close
 
 
 
 
 
APPRECIATION & FUTURE EQUITY
Appreciation Rate & Future Value
 
 
 
 
 
Ending Balance
-
 
 
 
Click Icon to open a graph  
 
Future Equity in Home
=
 
 
 
 
Additional Equity w/Refinance
 
 
 
 
 
OPPORTUNITY COSTS AND GAINS
If you take money from an investment account to pay down your principal, there is an "opportunity cost" in doing so. This means that whatever rate of return those funds were earning will now change. So, to be fair in these comparisons, we calculate here based on the investment rate selected in step 2, how much you would have had. This amount is then used to compare against the accumulated and future value of the lower payment on the new loan options using the same rate of return and selected tax rate. This helps to evidence if there is greater value in moving those funds into the equity of your home in order to enable refinancing.
Lost Opportunity Value on Cash Used   OPTION 1   OPTION 2   OPTION 3   OPTION 4
Cash Used
 
Total Future Value
 
Investment Rate of Return
 
Gain on Investment
 
Tax Rate on Investment Gains
 
Tax on Investment Gains
 
 
 
 
 
Lost Opportunity Value of Cash Used
 
 
 
 
 
Opportunity Value of Lower Monthly Payments                
Monthly Payment Savings
 
Accumulated Savings
 
Total Future Value
 
Gain on Investment
 
Tax Rate on Investment Gains
 
Tax on Investment Gains
 
 
 
 
 
Net Gain on Value of Lower Payments
 
 
 
 
 
TOTAL PAYMENTS & SAVINGS
Payment Breakdowns for Years Selected Current
  OPTION 1   OPTION 2   OPTION 3   OPTION 4
Principal Paid
 
Interest Paid
 
Mortgage Insurance Paid
 
Total payments over years selected
 
 
 
 
 
Tax Savings                
Marginal Tax Rate
 
Tax savings on Interest Paid
 
Tax savings on Points Paid
+
Total Tax Savings
=
 
 
 
 
Payment Cost Less Adjustments                
Total Payments  
Less Principal Paid -
Less Tax Savings -
Net Cost of Financing =
 
 
 
 
Net Current Payments less Proposed Net Payments                
Net Payment Savings
 
 
 
 
 
SUMMARY & NET BENEFITS
In this section, the "Net Cost" of your current financing is calculated and then compared with each potential loan option as selected.
Total Cost of Financing: Current
  OPTION 1   OPTION 2   OPTION 3   OPTION 4
Total Costs & Payments
 
 
 
Lost Opportunity Value of Cash Used
 
+
 
 
 
Total Cost of Financing
 
=
 
 
 
Benefits Realized are subtracted from Total Cost:                
Principal Paid  
-
 
 
 
Tax Savings  
-
 
 
 
Net Gains on Payment Savings
 
-
 
 
 
Equals Net Cost of Financing
 
=
 
 
 
Net Cost of Current less Net Cost of Proposed:                
Net Benefit from Refinancing
 
 
 
RATE OF RETURN ON TOTAL COSTS
Total Costs
=
 
 
 
Rate of Return on Total Costs
 
 
 
Average Annual Return on Total Costs
 
 
 
RATE OF RETURN ON TOTAL CASH USED
Total Cash Used  
 
 
 
Total Costs & Payments
 
 
 
Principal Paid  
-
 
 
 
Tax Savings  
-
 
 
 
Equals Net Cost of Financing  
=
 
 
 
Note: Net Benefit figures here exclude Lost Opportunity and Gains on Savings. This is done in order to calculate the total return on cash used so it can then be compared to what those funds are earning now. Realize too that on a fixed rate loan, this rate of return will not vary the way most other investments do.
Net Benefit from Refinancing
 
 
 
Rate of Return on Cash Used
 
 
 
Average Annual Return on Cash Used
 
 
 
Move the slider to adjust the number of years analyzed
 
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1 40
 

CASH IN REFI – REPORT

Cash In Refi - Report
Investing funds from where they might otherwise be earning a lesser rate of return into your home's equity to enable the ability to refinance can prove to be a highly beneficial move. Below are comparisons of your current loan balance, term, rate and payments vs. up to four proposed alternatives with the costs and benefits fully illustrated:
The number of years used for this analysis =  
  Original Loan Amount(s) =  
Total Current Loan Balance(s)  
  OPTION 1   OPTION 2   OPTION 3   OPTION 4
Principal Reduction to be Made  
 
 
 
 
New Proposed Loan Amounts  
 
 
 
 
Interest Rates  
 
 
 
 
Original or New Loan Terms  
 
 
 
 
Pre-Payment Towards Principal  
 
 
 
 
Remaining Term w/Pre-Payment  
 
 
 
 
Monthly Mortgage Insurance Costs  
 
 
 
 
Payment and Savings Comparisons:
While often different from the actual "net" benefit due to varying amounts of principal and interest paid, the monthly payment savings is a good place to start. For many, this can be the most important factor as immediate household cash flow improvement can make the difference between being able to keep a home, making ends meet or even facilitating other investment or savings.
    OPTION 1   OPTION 2   OPTION 3   OPTION 4
Total Monthly Payment  
 
 
 
 
The Grand Total Payment indicated here is the total of your existing payment(s) with principal, interest, taxes, insurance, MI/PMI and any extra amount as a pre-payment towards the principal. These figures are based on your current financing and new factors selected.
Grand Total Monthly Payment  
 
 
 
Monthly Payment Savings  
 
 
 
Total Payment Savings over Years Selected  
 
 
 
Total Payments and Costs over the number of years selected:
Total Payments and Costs
     
Loan Balance Comparisons:
Depending on the age of your current loan, refinancing with a lower rate can speed the reduction of your loan balance. As well, using your interest savings to pre-pay principal will accelerate the process even further. Whether you choose to use or invest your savings elsewhere or to pay off your loan sooner, refinancing can be one of the most beneficial investment opportunities that you can ever take advantage of.
    OPTION 1   OPTION 2   OPTION 3   OPTION 4
Balance at end of Year Number  
 
 
 
Loan Balance Differential  
 
 
 
Total Cost and Break-Even Comparisons:
Closing Costs and any Penalty Paid on Withdrawal of the funds to pay down your principal are shown here along with the number of months it takes to break-even or earn back the value of the costs by way of the monthly payment savings
    OPTION 1   OPTION 2   OPTION 3   OPTION 4
Closing Costs
 
 
 
Total Penalty on Withdrawal
 
 
 
Total Costs
 
 
 
Months to Break-even on Costs
 
 
 
Rate of Return on Total Costs:
It's not uncommon for the average annual rate of return on your closing costs to reach amazing levels. This demonstrates the power of leverage at it's best and evidences that refinancing can be the best guaranteed investment available.
Rate of Return on Total Costs
 
 
 
Average Annual Return on Total Costs
 
 
 
Rate of Return on Cash Used:
Total Cash Used  
=
 
 
 
Note, the net benefit figures here exclude the lost opportunity and gains on payment savings so you can compare the total gross rate of return on your total cash used vs. what those funds may be earning currently.
Net Benefit from Refinancing
=
 
 
 
Rate of Return on Cash Used
 
 
 
Average Annual Return on Cash Used
 
 
 
The Net Benefit of Refinancing:
To determine the bottom line "Net Benefit of Refinancing" we subtract the "Net Cost" of the current financing from the "Net Cost" of the new financing options. You can see the results of this below:
Current
  OPTION 1   OPTION 2   OPTION 3   OPTION 4
Net Cost of Financing  
-
 
 
 
The Net Benefit of Refinancing
=
 
 
 
Adjust Factors to See Changes to Results:
Marginal Tax Bracket
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0 65
 
Rate of Appreciation
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0 20
 
Investment Rate of Return
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0 20
 
Tax Rate on Investments
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0 65
 
Number of Years for Analysis
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1 40
 
 
BOTTOM LINE REVIEW
Here are the most important elements boiled down to the simplest view possible. These reflect only what you actually spend, the amount that your payment changes by each month and then taking all of the much more detailed analysis above into account, the actual net benefit of refinancing over the number of years selected.
    OPTION 1   OPTION 2   OPTION 3   OPTION 4
Closing Costs
 
 
 
Monthly Payment Savings  
 
 
 
The Net Benefit of Refinancing
=
 
 
 
Number of Years for Analysis
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Not everyone likes the idea of having to pay down their loan balance in order to be able to refinance, yet, if you do find yourself in that position and have the resources to be able to do so, the rate of return that can be realized on those funds can be pretty healthy. It's typically best to assess the current and future prospective returns on that money and then compare that to the numbers here. If the rates of return are favorable or even if only close, keep in mind that a fixed rate loan will not change and is therefore not subject to market fluctuation while most investments are. In other words, locking in a lower payment for a guaranteed rate of return while still being able to use those savings each month to invest elsewhere to capture the possibility of future rising investment returns can be safe and secure today, while still leaving even better opportunities open for tomorrow.


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This information does not constitute an application nor a Good Faith Estimate. Every effort has been made to assure the accuracy of the information and mathematical calculations provided by these calculators however, the provider, makes no guarantee and maintains no liability for use of or reliance upon the results. These calculations represent "what if" scenarios, are educational in nature and where projections are illustrated, they are not intended to predict future performance of the markets and/or specific properties.
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