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Home > Refinancing our house... headache!!!!

Refinancing our house... headache!!!!

March 3rd, 2015 at 02:25 pm

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.

4 Responses to “Refinancing our house... headache!!!!”

  1. creditcardfree Says:

    It can be really difficult to be on a different page then your spouse. I'm guessing you both have different view points of how you feel about money. Dave Ramsey says women tend to want to feel secure financially...thus why you probably want to get the debt off your shoulders. He may wanting to retire and not work forever...thus maybe swayed by the potential for high returns on his investment. The truth is you can do both!

  2. snafu Says:

    With so many major changes in your life In a brief time frame, your view is understandable. Looking at it as an outsider, I hope it's ok to offer a different viewpoint. Building on CCF's comment, you can do both!

    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.

  3. jillybean Says:

    Have you or hubby looked at a mortgage calculator for the different options? My suggestion would be to look not just at the monthly payment for each option, but look at the total amount of interest paid for each loan (on most mortgage calculators to see total interest paid, you have to ask to run the amortization table and look at the totals at the bottom). Hubby might be surprised to find thst the money "saved" each month is offset by how many more years you pay interest. We weren't able to afford to refi our loan at 10 or 15 years, too tight, but found a lot of our local banks offered 20 year terms at better rates than 30 year, we opted for that. Just something to look at, what makes sense for you depends on rates, how much you are borrowing and your budget.

  4. Nebraska girl Says:

    Thank you for all of the feedback! I really appreciate it! I have done several amortization schedules on Bankrates website. I basically did every .25% down from what we have now to 3.5% and took the difference for what we pay monthly now to what we would be paying and added that as a monthly extra payment. That was awesome to see!

    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!

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