Mortgage Refinance Payoff Calculator With PMI

PMI Refinance Payoff Formula:

\[ n = \frac{\log\left(\frac{M_{\text{total}} - \text{PMI}}{(M_{\text{total}} - \text{PMI}) - P \times r}\right)}{\log(1 + r)} \]

Total Monthly Payment:

USD

Monthly PMI Payment:

USD

Loan Principal:

USD

Monthly Interest Rate:

decimal

Number of Payments:

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1. What is a Mortgage Refinance Payoff Calculator With PMI?

Definition: This calculator determines how many payments are needed to pay off a mortgage when refinancing with Private Mortgage Insurance (PMI).

Purpose: It helps homeowners understand the impact of PMI on their refinanced mortgage payoff timeline.

2. How Does the Calculator Work?

The calculator uses the formula:

\[ n = \frac{\log\left(\frac{M_{\text{total}} - \text{PMI}}{(M_{\text{total}} - \text{PMI}) - P \times r}\right)}{\log(1 + r)} \]

Where:

\( n \) — Number of payments (unitless)
\( M_{\text{total}} \) — Total monthly payment (USD)
\( \text{PMI} \) — Monthly PMI payment (USD)
\( P \) — Loan principal (USD)
\( r \) — Monthly interest rate (decimal)

Explanation: The formula calculates how many payments are needed to pay off the loan considering the portion of each payment that goes toward the principal after accounting for PMI.

3. Importance of PMI in Refinancing

Details: PMI affects your monthly payments and payoff timeline. Understanding this helps in making informed refinancing decisions.

4. Using the Calculator

Tips: Enter your total monthly payment, PMI amount, loan principal, and monthly interest rate (default 0.005 for 6% APR). All values must be > 0 except PMI which can be 0.

5. Frequently Asked Questions (FAQ)

Q1: What is PMI and when is it required?
A: Private Mortgage Insurance is typically required when your down payment is less than 20% of the home's value.

Q2: How do I convert APR to monthly rate?
A: Divide your annual rate by 12 (e.g., 6% APR = 0.06/12 = 0.005 monthly).

Q3: Does this include taxes and insurance?
A: No, this calculator focuses on principal, interest, and PMI. Taxes and insurance would be part of your total payment but don't affect principal payoff.

Q4: Can I use this for loans without PMI?
A: Yes, simply enter 0 for the PMI amount.

Q5: Why does PMI affect the payoff timeline?
A: PMI is an additional cost that reduces the amount going toward principal each month, potentially extending the payoff period.