Mortgage Refinancing

I’m in the process of refinancing my mortgage.  My current rate is at 4.875%, and I’ve managed to lock in at a 3.5% rate.  I should have tried to refinance sooner before rates started to rise again.  But either way, that kind of drop isn’t bad.  I’ll break even in around 15 months, maybe less, depending on what the final closing costs will be.

I’m hoping this is a less painful process than getting the mortgage in the first place.  So far, it has been.  For one, they only need bank account statements from the account from which I am pulling the closing costs.  That’s good because I keep money in both a local Brick and Mortar bank and at ING Direct, not to mention all of my various retirement accounts.  They needed all of that information for the first mortgage.  It wasn’t hard to pull it all together, but it was a little annoying.

I’m waiting to hear what the next steps will be.  I do have to get my house re-appraised, which is a bit nervewracking.  I’m hoping it appraises at the same amount it did when I bought it in February 2011. After all, I’ve put money into this house!  I did landscaping work!  And… well, I guess that’s the only thing that might change the value when it comes to an appraisal.  The other changes are more cosmetic and just make it look nice.  (Of course, I’m not doing any of this work to increase the value – I’m doing it because living in a nice house makes me happy.)

I’m looking forward to a slightly lower mortgage payment.  I haven’t decided what to do with the extra money.  I’ll probably funnel it into a “home improvement” fund so I can finally get that fence and storm door that I want.  I could just continue to pay the same amount on my mortgage and pay it down faster, but I think I would rather use it to continue to make my house the home I want it to be.

Megan Smith

Megan is a 30-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:

In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance.  It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information.  It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck.  While that was working for me, clearly I needed a better plan.

While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.

Except that’s not what an emergency fund is for.

So I did a lot of research, read a lot of blogs, and decided that I needed a plan.  I needed to budget.  I needed to know what I was spending my money on.  I needed to prepare for the future.

I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way.  I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.