It’s Been Two Years Since Our Refinance

Two years ago we completed the re-finance of our house.  I thought I would go through some of the numbers and things that have happened.

Original Loan: 30 year mortgage, 5.875%, closed July 2007
New Loan: 15 year mortgage, 3.375%, closed November 2011

Increase in monthly payment: $157.69

Reduction in total term: 10 years, 8 months

Principal paid on new loan in the first 24 payments: 10.67%
Principal paid on old loan in prior 24 payments: 4.97%

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Why I’m Glad I Have Someone Do Our Taxes

I’ve been lucky enough to have someone do my taxes for as long as I’ve ever had to file them.  How did I get so lucky? Because my dad has been lifelong friends with the guy that does them, and he’s always treated our family very well.

I’ve never questioned his ability, but whenever I see something I don’t understand on a tax return, I ask about it, for the simple sake that I want to understand things.

We re-financed our mortgage last year, so when I was estimating our tax return, I entered the closing costs, but when our tax return came back, this wasn’t on here.  Only a small portion was.

I knew he was correct.  He always is.  So, I didn’t sweat it and in fact I waited until after tax season was done before I dropped him an e-mail asking why the closing costs were nowhere to be found.

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Closing Day!

This afternoon is our scheduled closing.  It amazes me how many details are rushed until the last minute.  At T-minus 24 hours, I didn’t even know the final mortgage amount.

I had gotten confirmation that the closing was taking place via an e-mail.  I requested a change from the info (they were still using my wife’s maiden name which is how it was on the original mortgage since we had not yet gotten married) and had inquired about final numbers.  A lady called and still said ‘everything was in process’.

They also told me that I would likely be getting a check at closing, because they’d overestimated the closing costs in the Good Faith estimate, but had kept the same mortgage amount.  I said that I wished that she could just change the mortgage amount so it would be a net-zero transaction, and she told me ‘Oh, no problem, we can still do that’.

With less than 24 hours to go.  But she assured me that this happened all the time and that everything is going, in her words, ‘Great!’

Makes me nervous but so far everything has been smooth sailing, so let’s keep our fingers crossed.

The Funniest Part Of The Mortgage Re-Finance Conversation

As I mentioned earlier in the week, we’re looking to re-finance our home loan to a much more manageable 3.375% rate on a 15-year mortgage compared to the current 5.875% 30-year loan we have today.

The conversation with the loan agent went remarkably well, but the part that had me laughing was when she was giving me our credit scores (over 800!) and said “Oh, I notice you don’t have one of our ??? credit cards.”  I don’t even remember the name of the card, but I politely declined.

I couldn’t help but laugh and it does show that there is humor to be found when talking to a bank.  You have to keep your eyes out everywhere for people trying to get you into the latest and greatest credit card.

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Jumping On The Re-Finance Bandwagon

With interest rates on mortgages falling, I couldn’t help but be intrigued when I saw 3.375% on a 15-year mortgage.

The biggest, problem, I thought, was that we had nowhere near 20% equity in our house, so I wasn’t sure if a re-finance would mean one or more of the following:

  • I’d have to bring a big chunk of money to the table to get to the 20% line
  • I’d have to start paying an escrow fund (we pay our own taxes & insurance and I would prefer to keep it that way)
  • I’d be forced to pay PMI which would probably wipe out some or all of any savings.

Still, 3.375% is 3.375%, especially when you’re currently paying 5.875% on a 30-year note.

My mortgage is with Citi.  I went online, as that’s where I do all of my business with them, and filled in a few fields that would allow for a mortgage rep to contact me.  I figured it would take a few days.

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