How to shave $300/month from your budget: Refinance

This is the primo market for refinancing:  I finally closed on my refinance that I was working on for the past 45 days!

I went from 6.375% to 5%, eliminated $99/mo of PMI and am now saving $300/month.  I was able to appraise my home high enough to give me 20% of equity, thus eliminating my PMI.  The refi cost me about $3500 so I’m estimating I should make that up within the year.  After that, it’s $300/month of savings!  It’s hard work to do anything in this lending climate, but the hassle could be worth it!

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Ready for your shave?

Definitely run the numbers and see if it’s worth it.  If you’re only going to be staying in your home for another 2-3 years, then it might not be.  By the time you realize your savings, you would be out of the home!  However, a simple way to know for sure would be to use an online amortization calculator, punch in your interest rate and home loan and compare it with today’s going interest rate.  Divide the cost of the refi (could be $3000-$4000) with your savings and that’s the number of months it will take to make up the cost.

I’m ready, now who do I call?

I used Tracey Day (512-966-7246) with Home Source Mortgage in Georgetown, Texas and he worked like a dog to get all of my paperwork done.  Because of my investment properties, I had a debt to income in the low 50% range and so he had to be real creative with justifying it financially!  Usually, the banks scrutinize anything over a 46% debt to income ratio.  So if you need some help in this area, Tracey Day has been worked over with my file and should be very experienced with just about anything now:)  If you are curious about how your home will do during the appraisal process, he can connect you with some appraisers to give an opinion of your home’s value.  I used Pat Carey with the Georgetown Appraisal Group (512-750-8480).

So tell me about your experience….were you able to shave your budget through a recent refinance? Anybody out there beat $300/month? I’d love to hear your story! Want the latest updates on Georgetown Texas Real Estate, news and latest developments? Sign up for the blog by clicking the link below:

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