We're moving forward with refinancing our house to a 15 year mortgage. Bryann has a buddy on his softball team who is a loan officer at Umpqua, so Bryann has been keeping close tabs on mortgage rates. When they dropped to a record low 3.25% on a 15-year mortgage, Bryann and Dave filled out some paperwork and locked in the rate. We're not sure how it's all going to play out over the next couple of weeks, but we're taking the next steps.
I've run the numbers for a couple scenarios, just to make sure we really want to do this. A 15-year mortgage means a higher monthly payment, and since we're working on paying off our student loans, we could definitely use the extra money every month. But we'll only be behind a month or so in our loan pay-off plan if we go this route. And several factors just keep pulling me back to the 15-year loan. Most of it though is that the money we're putting towards our mortgage will go farther for us.
First of all, we won't be paying pesky mortgage insurance anymore. That's money I don't have to think about throwing down the drain. Secondly, the percentage of our mortgage payment going towards interest (right now) will be lowered from 75% to 38%. That's more money I don't have to think about throwing down the drain. And over the life of the loan, we'll save almost $70,000! Wooooooooooo!!!
Even short term, even if we consider selling the house at the end of our required stay (3 years from the purchase date), we'll have over $4,000 more equity in the home.
So next up is an appraisal on Tuesday, then deciding if the loan-to-value is really worth it. Then signing a crap-ton of paperwork... again... We're excited about where we're going, and all the good things we're doing for our financial future.
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