After some careful consideration, we have decided to jump on the refinancing bandwagon.  We're excited because we're going from a 30 year mortgage to a 15 year one, and in my mind, 15 years sounds SO MUCH better than 30 years.  I still can't wrap my brain around what 30 years looks like... Probably because it's more years than I have been alive.

Now, you should know that we weren't really going to have to take 30 full years to pay off our mortgage.  Because we made a large lump sum payment in the amount of somewhere around $28k shortly after we sold our last house, Dave thinks that we were on a trajectory to pay off our house in 16 or so years.  Not bad, really!

But by refinancing, we're getting a lower interest rate, which is part of the reason why we were able to get down to a true 15 year loan. With the lower interest rate and the 15 year term, this means that our monthly payment is going to be about the same as it was on the original loan, which means that we're "saving" at least one full year's worth of payments, which is roughly $15,000!  (This is assuming that we were really going to be able to pay off our last mortgage in 16 years.  Since that's just an estimate, it's possible that we're saving even more!)  Not bad considering that we're only paying $150 in closing costs!

I'm definitely excited about this and even though it won't change much for us in the short term in terms of saving money, long term it will be great to have our house paid off in 15 years (or less!)

If you have a mortgage and are thinking about refinancing, it really can be beneficial.  We are getting a lower interest rate, a shorter mortgage term, really low closing costs, and we don't even have to change banks/lenders!  This new mortgage is through the same bank so they were even able to use our original appraisal value, saving us a couple hundred dollars there as well!  Interest rates are still really low, but it won't stay that way forever!

Laura, of Life Happens, has been writing some great money related posts this past week.  Be sure to check her out!


Laura said...

I don't know anything about refinancing AT ALL but it sounds good. 30 year motgages suck. :) We won't buy anything that we can't make work on a fifteen year mortgage. Go you. Pay that thing off!! :)

(PS... My blog is actually called Life Happens but when making the url that was already taken and that is where Laura blogs again comes in. HA! No biggie though.)

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