At the moment, life has left me in need a bit more cashflow (which should be obvious if you’ve been reading this site before now). Most of the things I’ve checked out so far have produced small change. My budget? Doesn’t always balance. Barring a large increase in income, we need to reduce our expenses.
It’s time to consider one of the biggest reduction methods. It’s not really feasible to sell the house at the moment, but we certainly can reduce the monthly payment.
It’s time to refinance.
Is it the right time to do that? For us, it certainly is. Our main consideration right now is our monthly payment. (The secondary consideration is our interest rate; we will get to that in a moment.) We can reduce our monthly payment by over $100, which will make a big difference for us.
It’s a good thing to live in your house without worrying about cashflow every time you make a mortgage payment. And no, this is not my house.
Now, I know there will be some critics saying we are doing ourselves no favors; after all, won’t our balance go up thanks to the closing costs? Maybe a little; we are getting a fair amount of lender credits, so that we might not need to pay anything at closing or roll anything into our current balance (assuming our lender is being honest with us). Will things play out that way? We’re certainly hoping so.
With all that said, we didn’t rush into this and run with the first mortgage company we saw. After all, it is rather a major thing to determine to whom we will be paying monthly payments of four figures. Not all lenders are going to be the same. Even our own credit union didn’t make the cut with regard to the proposed interest rate and closing costs. (The first lender we checked out had closing costs which were twice that of our credit union. The payback period for those closing costs, with the lower payment that lender would have given us, would have been more than five years. No, thanks.)
Obviously, an important part of our search for the right lender was related to the interest rate each lender would offer us. I would have thought, when we started to look into refinancing, that the different lenders would probably offer pretty much the same rate, but that was not the case. Rates varied (somewhat) wildly, which, honestly, made our selection somewhat easier. Once we had determined which lender made the most sense to us, we actually were offered a choice of rates. A better rate? We pay a bit more. A higher rate? Then the lender credits go up. Quite a bit up, as it turned out.
I don’t really have any affiliate links to place here. I simply clicked through Zillow and found what appeared to be the best deal for us. It was fairly simple. Just search for the best deal and work with the lender you have chosen. Obviously, the process will take a few weeks, but if you can save money every month without adversely affecting your principal, why wouldn’t you?