Let's Talk Finances

Refinancing
101

For many people in this country the Covid-19 pandemic was an unprecedented and daunting time. Many were out of work and really strapped for cash.

Thankfully, we are blessed with jobs that allow for us to work from home, so the transition was seamless.

We did do some furloughs at my job, so I found myself out of work for a total of 4 pay periods. In the grand scheme of things, that’s very mild!

This pandemic really reminded me of the age old, but often unrealistic finance tip of having 3 months of bill money in your savings. For us, that means about $10,000. This newly realized goal led me to a review of all my monthly expenses to see if there was anywhere we could trim fat and save more. 

This post was sponsored by Diamond Bloggers. All opinions are my own.

It’s no secret that interest rates right now are at a record low. So I contacted my mortgage company to inquire about refinancing.  30 minute into that  call, I was half way through the application process. My lender assured me it was a quick process, which wasn’t exactly correct but I digress. We don’t have a ton of equity just yet, so we aren’t looking to cash out, we just wanted to take advantage of a lower interest rate if we could. We were paying  5% interest and we would drop down to 3.625%. Saving us  $50,000+ over the life of the loan. We will save even more if we continue making  our extra monthly payments. The reduction in interest rate offers us instant gratification in roughly a $200 cheaper mortgage payment. We usually pay an additional $200-250 per month, so this will allow us to keep making our extra payment at the same price we are currently paying. *SCORE*

Warning: The Refinancing process is just as annoying as buying a home.

Lots of paperwork, lots of watching your credit score, and lots of evasive questions about your spending from underwriters. All in all, it wasn’t too bad. Due to the timing of our closing and everything just beginning to open up, the title company sent out a mobile notary for our closing. We signed a bunch of papers but overall it took less than an hour.

This is a big decisions as you are taking out a new loan. Here are a few things to consider:

  • Compare how much you owe to how much your new  loan amount will be. Having only been in our house 2 years we hadn’t made a huge dent in our note so the impact was minimal. 
  • Compare how many years you have left of paying vs starting a new term of 15-30 years.
  • Access your plans for the next 6 months. Your spending  will need to be put on freeze during the month or two of underwriting. So many sure you aren’t planning on taking out any other loans, spending, or even depositing large sums of money.
Need a loan but have less than perfect credit? Consider hard money loans!

If it makes sense for your family, you should certainly consider refinancing!  This is a wonderful time to shop low interest rates and almost anything can be done remotely (Docusign is your friend).

Have a great refinance story you want to share? Maybe you have the best lender on the planet? Tell me all about it in the comments! 

A mobile notary came to our house and made the closing process super easy!

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34 Comments

  1. Leesa July 17, 2020 at 8:19 pm

    This is going to help so many people through the refinancing process. There’s so much you have to know, and it can be incredibly hard to navigate through it all.

    Reply
    1. admin - Site Author July 17, 2020 at 9:33 pm

      I’m glad I could help. I had no idea it was just as involved as the original closing process.

      Reply
  2. Deanna July 17, 2020 at 8:42 pm

    This is such an awesome post, and it’s something I’ve been thinking about a lot- thank you so much for sharing!

    Reply
    1. admin - Site Author July 17, 2020 at 9:32 pm

      If it makes sense for you, now is a great time to do it!

      Reply
  3. Gervin Khan July 18, 2020 at 10:47 am

    Having a great time reading this article, I know that refinancing is not easy but I am sure it will help a lot. Thank you!

    Reply
    1. admin - Site Author July 18, 2020 at 9:20 pm

      Thank you for your comment!

      Reply
  4. Steven Morrissette July 18, 2020 at 12:41 pm

    Refinancing can be stressful but sometimes it’s the only option at least you have the choice of all these different places with different percentage.

    Reply
    1. admin - Site Author July 18, 2020 at 9:20 pm

      Very true! We were lucky to have options.

      Reply
  5. Marie Phillips July 18, 2020 at 1:45 pm

    We refinanced a couple of years ago and it dropped our mortgage by over $400. Plus the fees are already paid off and we owe less than we did when we started the process!

    Reply
    1. admin - Site Author July 18, 2020 at 9:11 pm

      This is really great to hear! I’m hoping for similar results.

      Reply
  6. Chei July 18, 2020 at 2:06 pm

    It may be hard but some people dont have any choice but refinancing but it is surely helpful. Thank you for sharing.

    Reply
    1. admin - Site Author July 18, 2020 at 9:19 pm

      Thanks for reading 🙂 !

      Reply
  7. the joyous living July 18, 2020 at 5:48 pm

    i have never had to refinance but these sound like some helpful tips. thanks for sharing.

    Reply
    1. admin - Site Author July 18, 2020 at 9:15 pm

      I’m glad you enjoyed!!

      Reply
  8. Emman Damian July 19, 2020 at 8:53 pm

    Refinancing 101 is a good topic. We need it to know our financial freedom. Also, to reassess our expenses. Cool right? It’s a great topic to discuss at home and office.

    Reply
    1. admin - Site Author July 20, 2020 at 7:30 pm

      It’s always good to re-evaluate your finances. I do it quarterly which is a bit much lol but yearly is a must do!

      Reply
  9. Yuki Reads July 20, 2020 at 7:21 pm

    Saving this post for when I have my own home lol! Some good tips in here.

    Reply
    1. admin - Site Author July 20, 2020 at 7:30 pm

      You will be ahead of the game!

      Reply
  10. Bennett July 20, 2020 at 10:04 pm

    So informative! This is such a thoughtful post, and will absolutely help so many people!

    Reply
    1. admin - Site Author July 21, 2020 at 2:05 am

      I hope it helps someone. Thanks for commenting Bennett!

      Reply
  11. Rose Hope July 20, 2020 at 11:33 pm

    This pandemic really put things in perspective for me as well including financially.

    Reply
    1. admin - Site Author July 21, 2020 at 2:04 am

      Same here!

      Reply
  12. Jessica July 21, 2020 at 2:35 am

    I didn’t know the process to refinance included all of this. You definitely gave some good points to consider!

    Reply
    1. admin - Site Author July 21, 2020 at 12:46 pm

      Glad I could Hep Jessica!!

      Reply
  13. Amanda July 21, 2020 at 11:02 am

    Lots of great information! I’ve never refinanced but my husband and I have been thinking about it. Thanks for the info!

    Reply
    1. admin - Site Author July 21, 2020 at 12:43 pm

      Now is a great time. Honestly I was afraid but it wasn’t too bad.

      Reply
  14. Puja Kumari July 21, 2020 at 12:06 pm

    Thanks for this amazing concept, refinancing. Get a lot of new info here on this topic.

    Reply
    1. admin - Site Author July 21, 2020 at 12:43 pm

      Thank you so much for your comment!

      Reply
  15. Monidipa July 21, 2020 at 3:10 pm

    Refinancing is really good even my certain family members are thinking of it! I believe refinancing helps during these hard times…

    Reply
    1. admin - Site Author July 21, 2020 at 4:35 pm

      It really does! And every bit of savings help right now.

      Reply
  16. Aj July 21, 2020 at 4:00 pm

    I really need to change my mind about money. I’d be perfectly fine letting my husband or financial advisor deal with all things financing and money. I’m glad you guys were able to take advantage of this unique time!

    Reply
    1. admin - Site Author July 21, 2020 at 4:35 pm

      Nothing wrong with letting him handle that if that’s his strength!

      Reply
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  18. free xbox codes August 18, 2020 at 9:26 pm

    Thanks for finally writing about > Refinancing 101 – Shannon Victoria.
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