Refinance

Thursday, May 17, 2012

About 3 months ago, Tony and I started talking with my cousin's husband about our mortgage with Wells Fargo. Our loan didn't originate with Wells Fargo, but they bought it and so we began our refi conversation with him, as he works for WF.

Without being a reflection of our opinion of Chris, Tony and I were completely skeptical about the whole HARP2 situation. We'd heard of refinances going very well and of months of back and forth without resolution, so we didn't put too much stock into our options.

We hoped for a 15 year mortgage, which would barely raise our mortgage by $100/month, but knew that it was very unlikely, as the loan couldn't be for more than 125% of our home's appraised value. A little over a month ago we found out that we're, ooooh you know, a good $45K underwater on our home. Yikes.

So, we moved forward with the 30 year option. Being that we bought in 2007, just before the real collapse, we had what was at the time a good rate of 6.25%. We were offered 4.375%, which will give us a $311/month savings.

I don't know about your personal finances, but $311/month is a significant amount of our monthly income. And, suddenly, it's ours again, to do with as we please.

Oh, oh! And we don't have a mortgage payment for the month of June!

Are you thinking what I'm thinking?

Unless you're also a weird Dave Ramsey follower, probably not.

Because what we're thinking is that we can put our 1 1/2 month of mortgage payment plus the additional $311/month towards debt reduction!

Friends, this whole pay off our debt, minus our mortgage, so that I can do photography at home with my kids is gaining a lot of traction. As in, Tony and I have a proposed quitting date. Mind you, it's at least a year or two away, but we can pinpoint it!

Also, the reduced mortgage payment puts us in a greater position to potentially rent our house in the future!

God is good.

23 comments:

Tiffany said...

That is great Leah. So happy for you!!

Sarah (Mrs. Ruffled Flats) said...

Amazing, Leah!

I'm so excited for you two!

Kelly Bartlett said...

Oh that is wonderful news! We just did this same thing last month. We paid half a payment in April and were able to skip May's payment. So wonderful having that extra cash in hand. We aren't saving as much as you monthly, but pretty close!

A quitting date, fabulous! Congratulations ;-)

Sarah said...

Amazing! Thrilled for you.

Bethany said...

so so awesome for you guys!! we are hoping to do the same.

Meredith said...

That is so amazing! We've been looking into refinancing too, because we bought about the same time you did and have about the same interest rate. BUT, apparently our loan is owned by Ginnie Mae, and everyone we've spoken to says that there are apparently absolutely no refinance options available for loans owned by Ginnie Mae. Which sucks, but what can you do?

Anyway, I am SO excited for you!

The Slacker Mom said...

That is so awesome. I really need to get on the stick with Dave Ramsey. We all but eliminated our debt other than my student loans, but it would be nice to have that accountability. And a plan!

Molly said...

So happy for you, Leah. As a freaky Dave Ramsey fan, I know just how much this helps with debt reduction.

We tried to refinance but our value already went down on our new house and it was going to take $10,000 out of pocket to refinance. I was major super duper bummed. It really would have helped us.

The Java Mama said...

We JUST did this last month and reduced our morgage payments about $115 dollars a month! Yay! We don't have a June payment either and it didn't cost a penny b/c I am employed by the bank. Now is the best time to do this with rates so low. Way to go!!!

Amy said...

wa-hooo!!!

This gives me a lot of hope. Our mortgage lender is going to be calling us in about a month to talk about refinancing as well. I'm so hopeful because we currently have a 6.0% rate and I'd definitely appreciate ANY savings!

Sara said...

That's great news about the refinance! The hubby and I refinanced about a year ago, and the whole process was such a pain. I'm glad to see it work out for you and your family!! :-)

Sarah Louise said...

Yay! That is so awesome!

Laura said...

I love this news! We are tackling debt like it's nobody's business, thanks to Dave Ramsey.

Crystal said...

That is awesome! I've been thinking a lot about refinancing lately... I just have so many questions...

Andrea said...

That is so wonderful!!

Jen said...

Yay! We refinanced in December and weren't able to do a 15 year either, which was a bummer. We only are saving $150 a month because our interest rate jump wasn't quite as much as yours. Totally worth it though!

Emily said...

Good for you, and even better for you that you're going to put the savings towards debt for your grand plan!!! B keeps talking about a 15 year refinance...and I keep thinking, but I'd really rather have the extra money each month :) We refinanced in 2009 - we also bought in 2007 at 6.5% and dropped to 4.75 - that extra money every month is so nice to have!

Andrea said...

Happy dance, Leah! I can't wait to see the day that you can stay at home with your babies and focus solely on photography!

We refinanced at the end of last year and it was fantastic. No December payment AND we're saving close to $300 a month as well. We of course up'ed Jim's retirement and focus on filling up those ROTH's. It feels good to save money, huh? :)

Kristal said...

YAY YAY YAY!!! I knew you refinanced with a good chunk of savings, but I LOVE reading these details. That is so excited, Leah!

We bought at the same time you did and got screwed when we sold in 2010 (had to do a short sale...oh so fun). But thankfully, God totally redeemed the situation with our current house. He is good!

Lucky Girl said...

Such great news! What a blessing!

Jen | Our Life Accounts said...

That is such incredible news! How exciting to feel like there is a light at the end of the tunnel and can start talking about a quitting date. We are getting soooo close to being done with the debt reduction but the next big step is saving up to be able to put down a sizable down-payment on a house. With that next massive step looming over us and the sky-high prices in MD, it looks like I'm going to have to work for quite awhile after this baby comes.

Noe said...

Gotta admit that no matter how much I have tried to understand, I don't get how mortgages and finances related stuff works in the U.S.
But I do understand that hard works pays off and this proves it!
I am happy for you! and I hope you get there rather sooner than later :)
I have been working on figuring out a plan to myself because one thing I have already learned: Dreams do not have legs, So you are the only one who can run to make 'em a reality.
Don't ever give up my friend! xo.

Julie S. said...

That is AWESOME!!

 

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