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Eeeeek!!! Friday was our closing day!
No, we did not buy a new house.
No, we did not buy a second property.
We are still majorly crushing on our current home and expect to for years to come. So, we did the financially responsible thing and refinanced our home.
When we bought our home almost 3 years ago, we got a 5.25% interest rate. Not bad at the time, but far from the great interest rate available today. We were able to refinance our home with a 3.25% interest rate.
With out getting too specific, the refinance is shaving hundred of dollars off our monthly mortgage payment. Considering I quit my reliable-paying day job not too long ago, we welcome a little break on the monthly cost of living in our home.
We also are a bit excited we get to “skip” next month’s payment. I hate saying the word skip, because you know those mortgage companies aren’t really letting you out of a payment. They just sort of put you on pause for a month while the loan is switching over. But, I still love that we have no mortgage payment due in March, and we will be starting up again with a much lower payment in April.
I will say the process was smooth and uneventful, but there was one part that had us a little nervous. Although the type of refinance we went through did not require an appraisal, our lender did. The house had to appraise for more than the new loan amount (probably a prudent thing for the lender to require). We opted to roll the closing costs into our loan, as well. So, the new loan amount equals the price of the payoff to our current lender plus our closing costs. The house had to appraise for at least that. Appraisals in this housing market are nerve-wracking.
We lucked out big time and our house appraised better than we needed. We had a couple of things in our favor. First, we bought our home at almost the lowest point of the housing crash in 2010. How do we know it was the lowest? Well, because we lost an entire year’s salary to sell our town home. Yep, we had to write a check with way too many 0′s to sell our previous home. It totally felt wrong. But, then we were able to buy in a down market, and got a great price on our current house. Second, the housing market has started to rebound in the Twin Cities. We know because our awesome realtor sends us market updates, and a house down the street just sold super quick. Lastly, we have made some improvements to the home. We did not do them with the intention of raising the homes market value, but rather to make this home our dream home. In the 3 years we have lived here, we added the deck and mostly finished the basement. We paid for both of those projects in cash, after penny pinching to save up for each one and taking on DIY projects.
We loved this house the day we bought it. We loved it even more the day we refinanced it. We expect the love for this house to continue to grow as we make it our home and make memories of raising our children here.