If you have been following my Facebook page, then you already know the good news:
WE FINISHED REFINANCING OUR HOUSE!!!
After much discussion, we decided to go with the 30-year-mortgage, hoping that we can put the extra money each month into paying off our debts (student loan & mortgage) faster by increasing our cash flow. For the last 7 years our interest rate was 6.25%, but our new interest rate is 4.125%.
Refinancing our house saves us 2.125% in interest, and will increase our cash flow by $204.26 per month!
Now that you know the good news, I want to assure you that the last 4 months of refinancing have not been easy. Here are some of the highlights from the last 4 months:
- May 21: We applied for our refinance for the 1st time, locking in a 4.5% interest rate. The process moved slowly because I had to keep reminding Wells Fargo that our 2nd mortgage (Citimortgage) was already paid off.
- July 27: Our refinance loan was denied by Wells Fargo. After frequent phone calls and Internet searches, I discovered that our loan application had been filed incorrectly. Wells Fargo believed we owned both sides of our duplex, but we only own the left side.
- August 20: Our refinance loan was filed a second time by Wells Fargo. The interest rate had climbed from 4.25% to 4.5%, and I asked if we could lock in at our original rate. I was told that was impossible.
- August 27: Our refinance loan was denied a second time by Wells Fargo. Our application had been filed incorrectly again, this time with the wrong address. They had filed the refinance loan for the house we rent in California, and not the home we own in Maryland.
- September 1: Our refinance loan was filed a third time by Wells Fargo. I had complained about the last two applications, and requested that we be given our original interest rate of 4.25%. This time my request was granted.
- September 28: We closed on our refinance loan on Friday evening after 4 months of phone calls, e-mails, finding and scanning documents, notaries, and snail mail. We had to shake our heads when the first notary they assigned to us lived in Maryland, not in California, so obviously she could not notarize the papers for us. The second notary surprised us with the great news that our interest rate had dropped a final time to 4.125%.
- September 29: Our refinance loan was funded on the last business day of the month.
In the days since we completed our refinance, I have had some time to reflect on what I have learned along the way. Join me again on Wednesday for “Refinancing? 10 Tips (Part 4)”!