For the past week, my head has been a gigantic swirl of numbers. On Tuesday, I actually gave myself a headache just thinking about various financial scenarios. The source of my constant wondering? My mortgage! Or more specifically, the refinancing of my mortgage.
Back in September, I discussed my re-calibrated plan for attacking my debt as well as having a blended mortgage. I believe I’ve mentioned it elsewhere around here, but a blended mortgage essentially means having two mortgages at different interest rates. When I made the decision to buy, I chose this option as a temporary solution to satisfy both my desire to own property AND maintain some semblance of a savings account. Instead of putting 20% down, I put down 10%–much to the horror of some PF experts. The silver lining is that because my mortgage was blended, I avoided paying PMI–which would have been more than the interest charges of the 2nd loan.
After aggressively attacking the second mortgage in 2011, I was able to pay off almost $10K in additional principal for the second mortgage (which has the higher interest rate that makes me cringe). So when I set up my 2012 goals, I aimed to pay off at least $9K to the mortgage because I know it was an attainable goal that could be stretched even further (not all of my 2012 goals are super-stretch goals). One full month into the year, I’ve realized that I want more. In addition to paying off extra and seeking an interest rate reduction, I want simplicity with my mortgage; I’d love for the two to become one. The best way to do so? Refinancing, baby!
With rates still at historic lows, it makes sense for me to move forward with refinancing both of my mortgages into one. According to my bank’s projections, I will be able to save over $360/MONTH by refinancing. Granted, I will extend the life of the loan, but I’ve only owned for 2 years–plus I will continue to pay down extra principal as much as possible.
The catch with all of this lovely news? Median home prices/values are still plummeting around the country, the first-floor unit in my building just sold for over $65K less than what my unit is valued at (thankfully it was a bank-owned, distressed sale), and the success of my refinancing efforts will be based on the impending appraisal of my unit. Essentially, I need the figure to come in at a value equal to or higher than my original purchase price to pull this off; which may be a tall order given the current market….
So I’m asking all of you (and basically everyone I know in-person…haha) to send some good vibes my way. Dust off those crystal balls and let the Appraisal Gods know that they really need to shine down on me in a few weeks. I’m not usually a gamblin’ gal, but I’m taking quite a risk with going through with this process; all in the name of budget slashing. Wish me luck!
Sending you good mojo!We refinanced a year after we bought our house. Our credit union made it super simple, I hope you have the same luck.
I would love to refinance right now, but property values just keep decreasing, ARG
Good luck to you, it is so hard to get the banks to help out in any way!!!They need that extra in intrest right now (greed). Congrats on paying it down so much in 2011!!
Depending of when you bought (pre-2009, i think) you may qualify for the HARP 2.0 program. No appraisal is needed. That's how we refi'd last year to our crazy rate of 3.8% rate. If you don't qualify you may want to talk to a local credit union, they may be better to deal with if you loan-to-vaule ration doesn't meet the standard.
We refinanced in July and it was a nightmare. We have excellent credit, our home has not gone down in value, we have over 50% equity, but the run around and background they did was just unreasonable and down right insulting. We have never been late on a payment,but they feel they can ask any question now. We finally called after the last set of really dumb invasive personal questions came and said, "We will pay for the appraisal we no longer want the loan, we have had it". They called two hours later and said, "Can you close on Friday?" Why, because we told them we did not want the loan. If you get jerked around try the same tactic. I have heard of several people now using this in our area. ca.
Thanks, Niki! I'm nervous as it's not looking too great with the appraisal, but I'm locked in and hoping for the best!
Ours have actually been pretty stable, which is why I have a feeling this could work. The glitch is that the first-floor unit in my building just sold last month as a distressed foreclosure. If I can convince the appraiser not to use it as a comp, I'm golden. Otherwise, I'll have to try again in a few months.
Thanks, Debby! I'm actually pretty lucky with my bank–they treat me well, answer all of my questions (and there are A LOT of them!), and generally keep me very satisfied. Here's to a great 2012
I wish I qualified for this program, but I bought my place in 2010
At least I received the $8K tax credit though…haha
Wow, that's horrible! I'm sorry you had to go through such a mess of a process. Nobody deserves to be treated that way. I'm happy to hear that it did eventually work out, though. I'll definitely keep these tips in mind if needed!
You didn't even need to give a reason. All you had to do was ask and your friend Rafiki is on it sending as much good vibes as possible.I really hope this works out in the bestest(I know it isn't an actual word) way possible for you.
Haha….thank you! I sure hope you're correct. Fingers (and toes and legs and arms) are crossed….
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