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%
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.
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:
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.