HELLO 3.25%!
Remember when I told everyone why we weren’t refinancing our mortgage? And then I ate my words by posting about our upcoming mortgage refinance? Well, good news, ladies and gents! Our mortgage refinance has finally closed, and there were NO ISSUES! Yes, really, it was as smooth as the other side of the pillow (wait, what’s the saying again?). Either way, it was awesome, and now we’re saving $200 a month!
Here’s the breakdown:
October 5th: Contacted the mortgage broker who I was referred to and discussed our options. We decided to go with the FHA Streamline refinance because our house value would not qualify us for the other two options. Had to send in some info:
1. Last 2 years W2s
2. Most recent 30 day pay stubs
3. Most recent 2 months’ bank statements. Source all non-payroll deposits over the amount of $300
4. Copy of driver’s license for both Michelle and I
5. Copy of your existing 1st Mortgage Note
October 9th: Locked the rate at 3.25%. BOOM! Thanks Fed. 
October 10th: Sign and return rate lock disclosure. Something about locking our rate. I dunno, I’ll sign anything. Either way, it was OFFICIAL BUSINESS!
October 11th: Remember when I told you about having to source all non-payroll deposits over $300 (If you don’t remember, just rewind this blog post by about 88 words.)? Well, I had a sizeable deposit from my car accident, so I had to scan and send in the check stub.
October 17th: Forgot to dot some “T’s” and cross some “I’s” (or cross my eyes while Teeing my dots? Man, this is confusing). So I re-finished signing docs and sent those in. I also needed to provide my home insurance rep’s contact info. Funny thing about that, I had no idea who it was. So my broker called the latest number I had and got passed to the current person to gather info.
October 31st: Well, this one was fun because I was on a plane to Florida. I had to download and email another bank statement. Luckily, the crappy hotel we stayed in had WiFi, so I was able to get this completed.
November 13th: Printed, signed and returned the loan “re-disclosures”. I guess the numbers changed slightly and needed to re-sign my life away. Done and done.
November 19th: Got a call from Escrow to setup signing appointment. Set it up for the next morning.
November 20th. Signing day. I met Michelle and our little one down at the fancy office for the title company. Everyone just smelled rich. We signed about 4,873 documents while our little one crawled around and around the table. Hey, at least he was self-entertained. We finished and walked out like we owned the joint.
November 27th: The deal funded and our refinance was complete. So we pretty much owned that refinance LIKE A BOSS!
Easy, Peasy
This was the easiest refinance I’ve read or heard about anywhere! We did most everything over email, finished everything in about 50 days, and never even met our broker in person. I really enjoyed the interactions with everyone involved, and now we are ROLLIN’ IN THE DOUGH! We’ve got less than a 3-year break-even date (haven’t gotten our old escrow refund, so not sure of the EXACT break-even date) and once MIP is totally gone, we’ll be saving $525 a month over our first mortgage! It a pretty sick upgrade and I couldn’t be more pleased with the outcome.
Comments: Have you refinanced lately? What rate did you lock in? How was the process? Has anyone been rejected for a Refinance?
Awesome! Great deal on the rate. We refinanced way too early so we’ve been told we’re really not candidates to do it now. We’ve tried a couple of lenders but no deal, oh well, we still got a pretty good cut when we did our refi.
John S @ Frugal Rules recently posted..Frugal Friday: Posts That Ruled This Week, It’s December Already Edition!
Yea, it was almost not worth it, but since we’re staying for another 7 years or so, the 3 year break-even will work out nicely.
Are you looking at the break-even point in terms of cash outlay only? Because it’s also important to look at the difference you’ll have in equity with the refi. Your dollar is likely going farther, building more equity faster.
Kacie recently posted..We saved a bundle at the dentist
Very true. I was just looking at the savings vs. how much my mortgage increased with fees and such. So, saving $200 a month and mortgage increased like $4k or so. When I wrote this article, it look like an increase of close to $7k, hance the 3-year break-even. But I didn’t account to more going toward principal, so that’ll speed up break-even even more. With a $4k increase, at $200 savings it’s less than a 2-year break even, without even counting the extra principal
With our refi, we immediately went to paying more toward principal than interest. With our 30-year, that would have happened at like year 12 or 15 or something. We’ll have several thousand more in equity in just a year’s time, even though our monthly outlay increased, we are saving a ton in interest and building that equity faster.
Kacie recently posted..We saved a bundle at the dentist
We’re still at a 30, just a lower rate. But I’ll look at our statements to see the difference in principal payment vs. interest. Thanks for the heads up!
You can use an amortization worksheet to see how much equity you’d have without a refinance in say, 24m, and how much you’ll have in 24m with the refi
Kacie recently posted..We saved a bundle at the dentist
Do you have one that you prefer? Linky?
Congrats. I wish it were that easy for us:( we contacted some people are we are not in a good enough position to do this
Bummer. You want the information for my guy that I used?
Welcome to the 3.25% club… all the cool kids are in it! =) Are you in a 15 or did you stick with a 30?
Either way, I am amazed at how smooth yours went after the trainwreck that ours ended up becoming. We barely made it closed in the 90-day window, and even after it closed, still dealt with issues and problems for another few weeks with the bank. An absolute nightmare that ate 4 months of my life.
Mrs PoP @ Planting Our Pennies recently posted..A Conversation On Charity & Philosophy
W00t! We are rocking a 30-year, wish we could have gone 15. I need ot get my income up, but hoping to pay it off in 15.
Sorry to hear about your ReFi, but hey, at elast it’s done now, right? Do you still have nightmares about it?
Good job! We should refinance, but we don’t expect to live in our house for that much longer. Great rate!
Michelle recently posted..eBooks: A Frugal Minimalist’s Dream
That was definitely a factor, it doesn’t make sense if you are about to move, because of the fees.
Congrats! It is kind of a pain to get all of that stuff lined up, but it is totally worth saving thousands of dollars to do it. Have a great weekend!
Greg@ClubThrifty recently posted..Tips for Job Seekers – The “What Not to do” Edition
Agreed. Lots of signing and scanning, but not bad at all for the ROI.
We, like the PoPs had a terrible ordeal with our last refinance, but ended up with 3.25% as well. No complaints for sure.
Kim@Eyesonthedollar recently posted..The Sandman, Hypnosis, and The Village People
It’s crazy to think how long it takes from start to finish. We’re currently going through the same process and I’m eager to see how quickly it will go through. Congrats on saving $200/month!! That’s A LOT.
Jason recently posted..5 Things You Didn’t Know About Credit Cards
Great job!! We just bought about about 6 months ago for a pretty low rate so we probably won’t refinance for a few years. Not sure if we’re going to stay here forever at this point anyway!
Gillian @ Money After Graduation recently posted..My 2012 Income Goal: failed, but had a good time anyway
Thanks Gillian. Can I ask what rate you locked? Sounds like you got in at the right time.
Well that’s pretty freaking awesome man! Yeah, I hate walking into mortgage places, they all seem to drive expensive SUVs and just act and seem more rich than they should be. I feel like they have dollar signs in their eyes and we’re all the targets!
TB at BlueCollarWorkman recently posted..Ambulance Chasers
Lol, yea, it felt fancy. Which is awesome, because we were totally under dressed and had a baby with us
Of course, they were in love with our kid, but who could blame ‘em?
We’re in the middle of an FHA Streamline refi right now. We’ll barely meet the 5% reduction requirement, but any money saved is good for me! So far it’s been smooth, just kinda slow with the holidays.
Holidays slow everything down, so definitely expected. Let me know how it goes. Hopefully as smooth as ours did.
Great job! It is so good when you can take advantage of the lower interest rates and save money each month. I’ve done that a few times with the houses I’ve owned over the years.
Tackling Our Debt recently posted..Now Why The Hell Are They Blinking?
It really is a great option. Glad I tried again. 3rd time’s a charm, as they say.
I know nothing of the refiancing world, so when I first read through this I thought, man what a pain in the butt, but then you said it was pretty easy. That makes me wonder what a bad experience looks like.
Haha, you probably don’t want to know!
Great deal mate, congratulations. When we bought our house we thought we were getting a great rate only to realize it was going down down down. It’s still great but not as good as some. We’ve never refinanced before. Cheers Mr.CBB
Canadian Budget Binder recently posted..Budgeting With Mr.CBB Got Us Back On Track!
If you see yourself in the place for a while, a ReFi might be worth it. Have you looked into it at all?
Wow, that is a fast refi at 45 days! Congrats.
Can you remind me who gets to do an FHA loan again?
Thx
Financial Samurai recently posted..What Should I Do Before Quitting My Job? 15 Things To Consider
THanks Sam. FHA is basically for those without the required 20% down payment. We put a small amount down and the only way to get in was using FHA. I would have liked to to conventional with more down, but it wasn’t in the cards at the time
You totally rocked this refinance, Jacob! Great job! I can’t believe you will be saving $525 PER MONTH over your last mortgage payment. That in itself is a small mortgage payment. Amazing job.
Holly@ClubThrifty recently posted..Tips for Job Seekers – The “What Not to do” Edition
Thanks for encouraging me to keep looking around, it’s awesome how much we’re going to save in the long run! I’m super excited for the mortgage insurance to go away and let the REAL SAVINGS begin
Wow, that’s a lot of money to be saved! Congrats on finding the savings and taking advantage of the opportunity. What will you be doing with the extra money? Paying down your mortgage faster, paying off debt?
Daisy @ Money Smart Guides recently posted..The Round Table – November 30, 2012
We’re still super tight with our budget, even with the extra money, so we’re going to just put it toward our monthly expenses
Wow congrats, that’s a lot of money you’ll be saving. We’ve never refinanced because we bought our first place last year. Thankfully we bought at a time with really low rates, so hopefully won’t have to refinance anytime soon.
KK @ Student Debt Survivor recently posted..Frugal Parents Bought a New Car-They’ve lost it
Sounds like you got in at a grea time. Of course, now that our ReFi is done, hoping rates and home values go up, up, UP!
Excellent job. This is one of those things that does take a little time and effort, but is well worth it with the savings and you will receive in the long run. I’m really surprised that more people don’t make the effort. I think for a lot of people, it just looks like such a huge task when viewed with the day-to-day things that need to get done that people just put it off until it never gets done. Congratulations on having the discipline and energy to see it through. Your wallet will definitely be happy in three years.
Thanks Jeffrey. Yea, it was a bit annoying, but we knew the long-term ROI, and were eager to do whatever it took! We heard some horror stories, so ours was prety smooth considering the alternative.
Great job… That rate is even better than ours!.. And I know it will save you a ton of money in the long run.. Also, you will get the side benefit of getting to skip a mortgage payment.. Woo!
Jefferson @SeeDebtRun recently posted..That Christmas Time of Year
Yup, just skipped and threw the leftovers back into savings.
WOOOHOOOO!!!
Congrats! I think you’ve locked rate in the bottom range; rates will go up in next 2-3 years.
Shilpan recently posted..How the Fiscal Cliff Impacts Your Finances
Thanks Shilpan! I’m hoping you’re right!
Congrats! I’m glad the process was so smooth and easy for you! That $200 a month extra in your pocket totally adds up. Happy for yall!
Cat Alford recently posted..My Favorite Christmas Memories
Thanks Cat! We’re pretty excited as well
We refinanced in September (just one year after purchase). Went from a 30-year at 4.5% to a 15 year at 2.875%. WHAT! Amazing. Also, our closing costs were only like $250 or so. How about that?
Kacie recently posted..We saved a bundle at the dentist
Nice work, that’s a wicked awesome upgrade! Plus you’ll be mortgage free MUCH sooner, and save quite a bit in interest.
Here’s the amortization sheet I use and love. http://download.cnet.com/Amortization-Schedule-for-Excel/3000-2057_4-10902935.html
Kacie recently posted..We saved a bundle at the dentist
Sweet, thanks!
I’m loving playing with this spreadhseet!
~GEEKING OUT!~
I figured you’d like it! Glad you’re finding it useful. It’s perfect for if you plan on making extra payments to see the impact it would have. Would love to hear about your faster equity after the refi!
Can I share this post? This is one I wrote about our own refinance, and how we’ll build equity faster: http://sensetosave.com/2012/09/10/closing-on-our-refinance-today/
Sure thing. It’s a great breakdown of the benefits of a 15-year mortgage. What a difference it makes, huh? Makes me want to kill my student loans that much more to start throwing some extra payments toward the mortgage! Thanks for the info