Tuesday, September 11, 2012

The Re-Fi: 15 vs 30

I'm a little late on this, but it's still somewhat new. Jennifer and I finally refinanced our home on Aug. 23rd after shopping around late June. The Spencer's helped us find a loan officer to go through as they were shopping around at the same time. We found the best price/rate at American Loans. Ours was a little more costly and troublesome since we're dealing with a duplex, but still worth the hassle.

I ended up working with Jason Erskine - the quote he gave me at the start was extremely close to where we ended. It was just under $1100 in closing costs and our appraisal cost was $850 (usually half that for a normal house). The appraisal came in at $235K for an owner occupy and $240K as an investment property. We needed it to come in at $215K to ensure we had 20% equity (hated those PMI payments) - so success there! I bought in March of '09 at 209K, but it appraised then for $230K.

Then we learned why it's wise to avoid changing jobs while in this process for employment verification purposes. I was dealing with one HR department that needed my last paycheck to clear first while the new HR department didn't completely have me in their systems yet. Then to learn I was switching back again made it all the more important that we hurry the papers through.

In the end we locked into a 3% rate on a 15 year fixed loan. Our total payment actually ended up being about $50 less each month - this while paying $336 less towards interest (and instead towards principal)! And of course that number just gets less/better each month.

With the new job and the refinance kicking in, we are on track to paying off our home a year earlier than expected - can't come soon enough!

Side note: it was also worth it to check on home insurance as well. After talking to a friend we were able to lower my home insurance payments by $22/month and my life insurance by $15 a month (I knew I was paying too much for that) - all for the exact same coverage. If anyone wants to check with him he's at preston@kelcoinsurance.com.



Andrea said...

Woot! Such a GREAT interest rate and dropping that PMI is killer. So so excited to hear you are closer to your goal. Go, go, go!

Stacy and Mike said...

That's my Sammy! Way to go! Can't wait for Debt Free Scream!