Refinance Saga

As I have been so MIA lately, you haven’t really heard the ongoing saga about our refinance. It was supposed to be quick. It was supposed to be easy. It was supposed to be painless. And it wasn’t any of those things.

Start to finish actually took 3 months! Can you believe that? It took us longer to refinance the loan on our house than it did to sell our old house and buy this house initially! We responded to a refi mailer we got from our mortgage company. They led us to believe that it would be super quick and fast if we went with them. They lied. The only thing we can figure is that once they get you on the hook, they don’t worry about finishing the refinance quickly because you already bit.

After about 2 months of (what we felt was) jerking us around, The Husband actually went to the mortgage office in our town and spoke with actual people. They were very kind and worked quickly and efficiently to get the ball rolling for us. However, at this time we were rolling into the holiday season so we knew there would be a natural slow-down.

Our loan then had to be transferred from their corporate office to our local office. And we had to start the process All. Over. Again.

To be fair, this was all happening during the final stages of my dad’s life and The Husband was so good about taking care of things and not burdening me with the details. In fact, he only told me what was going on with the refinance when I asked about it. He dealt with everything during that time so that I didn’t have to waste precious time or energy on it. I appreciated it so much!

Once we got the loan transferred “in-house”, things really did start moving along. We had to resubmit all of the necessary documents and re-sign some paperwork; but the biggest pain during the whole thing was actually our solar loan. We took out a 10-year loan on our solar. We have been paying on it for 1.5 years, with 8.5 more to go. Technically, there is a lien on our solar panels: not the house, not the mortgage, just the solar panels, but the lien on the solar equipment, makes it appear that there is a lien on our home. We had to contact our solar company and for the “low” price of $250 (plus a $30 wire transfer fee) they will release the lien on the solar for 25 days so we can refinance. We will have to do this every time we refinance our loan until the solar loan is paid in full. (We don’t plan to refinance again, but you never know what will happen to interest rates.)

To get a better rate on our loan, we bought a point. I don’t actually understand all the logistics regarding what that means, but I understand the end result. By doing this, we were able to get a slightly lower interest rate. The Husband did the calculations and the point will pay for itself in 23 months. Because we will have the loan for 27 years and 8 months, it was worth it. He also figured the math so we knew at what point was our “break-even” point for buying the point. For the first 23 months of our loan, we aren’t actually saving any money, but after that, and for the remaining 25 years, it will be worth to have refinanced and to have bought a point.

We bought our first house over 15 years ago and we have always had 2 mortgages. I am so excited to only have one mortgage payment every month! The bottom fell out of the market about 18 months after we bought our first house so we couldn’t ever refinance it. We were miles under water in that house for years and years. Once the market recovered and we were able to sell it, we didn’t have enough equity to put 20% down so we had an 80% loan and a 10% loan. In addition to paying on our current house for 2+ years, and pretty significant appreciation, we owed less than 80% of what it is worth and were able to refinance into one loan. I’m so excited!

Our previous loans were: 1^st mortgage at $2953 per month. We paid $3000 per month on this loan, so about an extra $47 per month. And our 2^nd loan at $279 - $375 per month, interest only. I paid a minimum of $300 per month but always tried to pay $50 over the minimum payment so at least something was going to principle.

With our refinanced loan, we have to pay $3003 per month… that is an increase of $50 over what we were paying for our first mortgage, but an overall decrease of about $250 - $275 as we won’t have to be paying a second anymore.

Hopefully we can send our “savings” towards our credit card. That would be $3000 extra sent towards the credit card over the course of the next 12 months.

As always, wish us luck.