I've owned my home for almost three years and I got a decent rate on my home loan at 5.25% for a 30 year fixed rate loan, but it could have been better (rates actually went up the month before I bought and I hadn't locked the rate yet).
In January, I contacted my mortgage specialist and found out what my refinancing options were. I decided to go with a No Cost 30 Year Fixed Rate loan at 4.25% which will lower my monthly payment by about $260 - woo-hoo!
It's called "No Cost" because you accept a slightly higher rate in return for the the closing costs of the loan being paid by the bank. However it's not completely "no cost" - you have to pay for an appraisal ($475) and I temporarily had to deposit $2000 into my new escrow account until my current lender sends me a check for what I currently have in escrow and essentially pays me back.
As mentioned, I had to get an appraisal in order to refinance, so I got that ball rolling in late February. I was a little nervous because appraisals have not been that great lately and many homes are getting appriased below their value. The fact that my house is a short sale and I bought it for cheap (by California standards) made me slightly less nervous because I couldn't imagine them appraising it below what I paid. I don't know why, but I feel weird about writing what I paid for my house online, so sorry folks.
My appraisal came back (eventually...there was some drama and a redo) and it was appraised at $25,000 above what I paid for it which made me happy (I've put about $16k into improvements so I would have liked to see a little higher than that). I think my house is worth more than what that final appraisal is, but I'm not trying to sell right now so I was just stoked it wasn't below what I paid which is what other people are experiencing. But I already told you it was cheap, so I really have nothing to complain about.
Refinance Bonuses
So besides getting a lower mortgage rate and dropping my monthly payment, because of my house being appriased for more than I paid for it, I now officially own enough of my home to not have to pay mortgage insurance every month. Second Woo-hoo of this post! So my monthly payment drops even more. Which means: hello surf trips!!
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| Both pictures - Cabo San Jose, Mexico - March 2012. |
My refi took a few months and finally wrapped up at the end of March.
The second bonus of my refi is that I got one month off from mortgage
payments! I didn't know what to do with all that extra money so I moved
it to my savings account really quick (you know, the Surf Trip Fund) before I was tempted to spend it on things I don't need, like more clothes, shoes, or another surfboard. Although I'm going to use some of it to buy myself a sweet mid century modern arm chair. I just have to wait until I run across the perfect one. I wanted this one, but was two days too late and someone else bought it first - boo.
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| My dream mid-century modern arm chair. |
The next time I post, it will be to give you an update on how awesome
my yards are looking now the that plants have matured and spring as sprung and put everything in bloom.
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