....that I know what I'm talking about. When it came to refinancing our condo I was like a deer in headlights. I had no idea what to look for, what to ask about, or what is a "good deal". And Lord knows it wasn't easy, but from what I can tell so far it was TOTALLY worth it. Even though I'm pretty sure my loan officer might want to put a restraining order out on me after the H-E-Double Hockey Sticks he put me through!
This post is really just about my
nightmare experience with refinancing- I'm not saying go out and do it, but it might be worth checking into because if the numbers work then you could save a bundle on your monthly payment. I will preface this with the fact that this may be super boring to those if you that don't own your home- and half of the time I say, "lucky you!" This stuff is a pain...
My plunge into the refinancing world came about for 2 reasons:
#1- Rates dropped significantly lower than when we bought in 2010.
#2- We originally had a 5/1 ARM and wanted to add a little more cushion to our timeline since Joey's residency ends, and we plan on moving, in 2015. But, since we can't say 100% that our place will sell right away I didn't want to be too freaked about the interest going up immediately.
So first came the round of calls to various lenders for quotes on interest rates and closing costs. I called 5-7 lenders and tried various types like big banks (ex. Bank of America) and online lenders (ex. INGdirect) to see what the options were. #1 Tip- don't fill out ANYTHING online that requires your SSN# when entering info for a quote, its probs a scam. Also, the quotes they give you online are VERY general and are not always accurate or include everything so don't be shocked when you end up paying more than what was quoted.
Turns out the bank (a local New England based bank) that I currently have my mortgage with had the best interest rate - 2.75% for a 5/1 ARM with 0 points. #2 Tip- check with your current lender first for a refi quote. Alot of the time they give the best deal...not quite sure why, but my guess is because you keep the mortgage with them as opposed to taking your business elseware.
The current rate they were offering was a 1.375% lower than what we had now (4.125%). This was NOT the best deal in terms of closing costs, but I did the math and we would make up the cost of the entire refi in 8 months from the savings we would have on the monthly payment so I went with it.
Next came the application process. This is a pain in the butt because you literally have to gather tons of statements, pay stubs, tax forms, etc. from the last few years. Once we were approved they told me they were going to schedule an appraiser to come out to the property the next week....
aaaaannnnddd........7 weeks later after I made weekly of phone/email bombs to the loan officer saying "WTF- where is the appraiser?", they finally discovered that all of my paperwork had been accidentally shredded because my file was mixed up with another person with my same name. So yes, I had to gather all that original paperwork AGAIN and wait another 2 weeks for it to be approved and processed.
The appraisal was FINALLY complete but it still took another 3 weeks to get all the paperwork approved on the banks end and schedule the closing. #3 Tip- if you think this is like a 30 day project your are wrong, from start to finish this took us nearly 3 months. Kill me!
Scheduling the closing was a battle in itself- if you don't know anyone in the midst of a surgical residency you may not get it- but asking Joey to try to leave the hospital during the day for an appointment at the lawyers office was like asking a girl to turn off RHOC mid cat fight. It ain't gonna happen.
Luckily, our loan officer owed us one big time and pulled strings to get the lawyers to come to us at the hospital. We were actually signing all the paperwork and Joey commented, "With all this paperwork and a lawyer here it looks like we were getting a divorce!". Hahaha, I told him that he would be crying and emptying out his wallet if that were true :)
In the end we have officially saved $440/month with our new rate. That's like BIG BUCKS in my book. Took FOREVER to get there, many somewhat hateful phone calls, 3 long months of gathering statement after statement, and about $1400 in cash upfront. But all in all, worth it!
So take the time to check it out. Just do the math and if you can recoup the costs in a reasonable number of months then you should definitely consider refinancing. We have increased our monthly transfer to our savings account so that we won't be tempted to spend the extra $440, but I think with all of my hard work I should get one months worth to splurge, right?!
XOXO KatiePin It