Thursday, April 2, 2009

Thursday Thrifty Tip: Refinancing Your Home Mortgage

Our biggest monthly expense ($1,333.21) is easily our home mortgage which includes our property taxes and home insurance. Even though over three years ago we were able to secure a 30 year fixed loan at a decent interest rate of 6%, things have changed.

Over the years we've carefully watched the interest rates, but it wasn't in our best interest to make any changes in our loan...that is until now!

Last week, my awesome hubby, Drew, contacted our loan officer and learned we qualify for a 4.75% fixed interest rate. This new interest rate would reduce our monthly payments to $1,168.89.

Folks...check the math! That is a savings of $164.32/month. In addition, after closing costs we will GAIN $51 that will be put towards the principal. With no real cost to change loans this is a "win-win" for our family's monthly budget.

Is your home mortgage working for you? Is it in your best interest to change your loan? My Thursday Thrifty Tip is to contact your loan officer today and determine if he or she can save you money with a different loan with a better interest rate. As always, make sure to be careful as you proceed to make sure that your money is really "working" for you.

From inside the little blue bungalow,
Katie Jean

Writer's note: The bottom picture is the back side of our first home in La Crosse, WI

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MerrandaVK said...

oh, I remember that house fondly. It was so beautiful.

anisaschell said...

Rick and I have been working on this. When we bought our home the rates were pretty low... fixed at 6.237 or something like that. But now they are lower and we've had a couple of calls in to the loan company. The hard part for us, is that our income was double when we bought the house (I worked full time then, no kids, etc.), but now it's hard to get around that income/debt ratio thing since Rick is the only one bringing home the bacon.
If we can refinance, we're also contemplating a 15 year mortgage instead of 30... the payment isn't that much more, but you save hundreds of thousands of dollars in interest. And if we had done that 5 years ago, we'd be a third of the way done paying off the house!