Third time is a charm!

We were finally successful in refinancing this house that’s worth nothing! Yahoo!  We closed Tuesday into a nice 30-year fixed mortgage with 20% down and at a much lower interest rate.  Our monthly mortgage payments will decrease by 47% and over the life of the loan (30-years) we will pay over $699k less than we would have if we stayed in our current mortgage.  Can you say jackpot?

We are so happy, but honestly the process has left a bitter taste in my mouth.  The amount of paperwork, documentation, credit-checking and honest bull-shit that one has to go through to take on a mortgage with a LOWER payment is downright insane.  Considering we have a good financials (good credit, stable incomes, no debt outside our house and student loans) one would think our story would be an easy one but I still feel slightly insulted at the amount of fact checking that occurred for a straight forward refinance.  It’s no wonder this nations economy is still going downhill.  I’m sure thousands of people would love to be able to lower their monthly payments but can’t due to many reasons; first of which is declining home prices and second is loss of employment.

Although I’m no mortgage lender or governmental agency that regulates mortgage lending, I would think that someone could come up with a plan that allows for everyone (regardless of their homes value today, how much equity they have, what their credit score is, or if they are employed or not) to take advantage of these insanely low interest rates to get into a mortgage that is more affordable with out stupid penalties like PMI or ‘second mortgages’ at higher rates to cover homes with <20% equity.  Instead we leave Americans in tight financial circumstances at high rates, with high payments.  One would think the banks would think refinancing a customer into a mortgage with LESS risk would be more ideal than keeping them in a mortgage that could someday lead to foreclosure.  And we can’t forget that spending less on a mortgage means more $$ going into this economy…people buying things…going on vacation.  Seems simple enough to me!

I’m glad we finally made it through since this finally opens the reality for us to start saving for a vacation home.  Our goal is to have enough saved up in about 5 years to act on something in Park City, UT.  Of course this means we will have to go to Park City a few times between now and then to scope out locations and amenities we prefer.  It’s a hard life we live…

Comments

  1. Yahoo! I don’t get the house financing at all. It makes no sense to me! Congrats on the new rate. And I say you should go be on House Hunters for that vacation home. I’d love a vacation home and would love to know more about how you came to that decision of doing a vacation home. We’re not talking one of those vacation clubs are we?

    • midwestkids says:

      Thanks! No time-share or vacation club for us. We want to buy a condo or town home ourselves. We will rent it out to friends and strangers (management companies help with this). It just seems like a good place to invest money (for us) and we should be able to break even with the mortgage because of the rental income. Oh and we will get minor tax breaks too. Win-win and we will have a great 4 season place to escape to!!!!

  2. Congrats! Perhaps having to wait was definitely worth it – my guess is the rates today are probably lower than in the past ( wish we would’ve know they’d be dropping even further!). Persistence pays :>

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