Posts in Family Finances

Refinancing 101

Let's Talk Finances


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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