Posted on: 19th Jul, 2010 04:44 am
i have 5,5% on my mortgage.if i decide to refinance to as the lender says 4,73%, plus without closing costs, would my payment be like this calculator shows? mortgagerefinance.com/mortgage-calculators/refinance-payment-calculator
is this the right calculator that calculate my new mortgage payments?and if there is no closing cost how does the lender make money?
is this the right calculator that calculate my new mortgage payments?and if there is no closing cost how does the lender make money?
Hi micotakis50
I will illustrate it you in a simple way.
If you look for the interest rates for savings account it is somewhere between 1.5-2.3 % annual.So there are plenty of people who keep their money in savings account at least they need to keep the minimum amount.So if the minimum amount is $ 100.and there are 10K customers with the bank.
Then at any point of time bank has cash worth $1000k where they need to pay the interest of maximum 2.3 % annually.So even if they lend some of this amount for mortgage for 4.3% and even without closing cost they are earning money because mortgage is long term contract.
DIPA
I will illustrate it you in a simple way.
If you look for the interest rates for savings account it is somewhere between 1.5-2.3 % annual.So there are plenty of people who keep their money in savings account at least they need to keep the minimum amount.So if the minimum amount is $ 100.and there are 10K customers with the bank.
Then at any point of time bank has cash worth $1000k where they need to pay the interest of maximum 2.3 % annually.So even if they lend some of this amount for mortgage for 4.3% and even without closing cost they are earning money because mortgage is long term contract.
DIPA