I’m thrilled to share that we’ve finally wrapped up our journey to refinance our mortgage. As of Monday, we closed on a new mortgage through the Home Affordable Refinance Program (HARP).
Here’s what happened since our last update:
### Home Appraisal
After our initial consultation and deposit, we just had to wait for the house appraisal. Finally, after eight years of not really knowing our home’s value, we received an official appraisal. Unfortunately, it came in at $137,000. This was lower than I expected, especially considering our neighbors with similar homes were appraised at $160,000. Still, $137,000 was enough to keep us within a 105% loan-to-value (LTV) ratio, which qualified us for the best interest rate.
### Savings Achieved
The refinance resulted in some significant savings:
– Our monthly payment decreased by $101.36.
– Our interest rate dropped from 5.75% to 3.75%.
– We went from a 30-year mortgage to a 20-year one, cutting out about 1.14 years of payments.
– In total, we saved $41,104.97 in interest.
If I continue to pay the extra $101.36 towards the principal each month, we’ll pay off the mortgage in 17 years instead of 20.
### Lessons Learned
This process was quite educational and led to many questions and insights regarding mortgages. Here are some useful resources we explored along the way:
– Points vs. No Points on Your Mortgage
– Paying Down Your Auto Loan vs. Your Mortgage
– Paying Off Your Mortgage vs. Investing
Now that our refinancing is complete, I hope these resources and our experience can help you with your own refinancing journey. Have you been thinking about refinancing, are you currently in the process, or have you recently finished? Feel free to share your stories!
