Right now our mortgage is solely in my husband's name as he bought it before we got married, which is fine. The interest rate is 5.25%, which stinks! He took his loan out a little over 5 years ago now as a 30 year term. We want to refinance our mortgage and this is the information we have gotten so far.
Hubby did something online and got a quote (I guess) of 3.75% and approximate closing costs of $3,300.00. He wants another 30 year term.
I called a few companies in our state and got quotes of 4% to 4.125% and approximate closing costs of $1,500.00-$2,000.00
I'm actually okay with doing a 30 year term and paying it off as a 15 year term. This way we could extra toward the principal when we can and if anything ever came up then we could stop and plan for it. I really looked at refinancing as a way to save a lot on interest and get the house paid off. Then, when our oldest child graduates high school then we would be completely debt free and able to save for whatever, with an additional $1,000.00 on top of our monthly surplus now.
Husband is looking at it as a way to invest. He wants to invest the money that we will be saving. This is unsettling to me, but I would rather do that then not refinance and not have that extra money each month to do with what we choose. Although, it just extends the loan an additional 5 years and we'd basically be paying the same in interest.
I feel stuck in this situation. Ugh!
When we wanted to pay off our $4,000.00 debt with 0% interest I had a hard time convincing him that we should just pay it. He did finally give in to that, though. I was thinking that maybe talking to a financial advisor would be beneficial for both of us, more settling to the person the advisor doesn't agree with and an actual plan laid out.
I guess I'll just keep praying about it.
Refinancing our house... headache!!!!
March 3rd, 2015 at 10:25 pm
March 3rd, 2015 at 11:45 pm 1425426335
March 4th, 2015 at 03:55 am 1425441310
What is your FICO score? How much equity/percentage of equity is already in the house? I wonder if DH used Bankkrate.com or an efficient mortgage search engine ? With interest rates only threatening to go up, he should be in a position to negotiate a lower than 3.7% rate and lower closing costs. No need to offer loan officers information about your plan to accelerate pay down with extra sums directly to the principal, SA style. They have all that up front interest on a new mortgage dancing like sugar plums in their heads.
I know you're busy with baby and more but I hope you can eke out time to read The Automatic Millionaire [Bach] or Danko's Millionaire Next Door, each available at library or pdf version to understand a different point of view. They are both quick reads offered by knowledgeable authors. We don't want you to step off the deep end and feel insecure but make decision understanding conditions long term.
March 4th, 2015 at 11:59 am 1425470370
March 4th, 2015 at 03:25 pm 1425482713
I think my husband feels like he got a late start on his retirement. I believe he started three years ago (27) and got serious about it when he got the job that he currently has. Right now 35% of our income goes to retirement. 24% of his income goes to his 401(k) and then we max out each of our Roths. He told me that once he sees the rate of return he gets in about six months then we will probably be able to reduce that. That was nice to hear, because although I want to be well off when we retire and I would like to be able to retire when he does (I'm six years younger), I still want to hit other goals now, like updating the kitchen, siding the house, getting a new fence, buying a family vehicle, etc.
I explained the numbers to him yesterday and he had me read some article about it. He doesn't know what he wants to do with this money he wants to invest, he basically wants it to be there in case we decide we need it or want to buy something.
@jellybean - my husband also feels like a 15 year mortgage would be too tight. I should run the numbers on a 20 year!