Wednesday, October 15, 2014

Mortgage Refinance

It's been a whole seven months since we started paying for our house, so we figured it was about time to do a refinance.

We weren't able to put down a full 20 percent down payment on the house when we purchased it, so we are currently paying for private mortgage insurance (PMI) every month. But, the housing prices in Denver have just been climbing and climbing since we bought the house, and estimates for our neighborhood made us think that we might be able to get the house re-appraised at a significantly higher value than our purchase price. This would automatically give us more equity (virtually for free) and probably push us over the 20 percent mark. (PMI is supposed to drop off automatically once you have 20 percent equity). It seemed worth a shot, anyway.

Brianna did a lot of emailing and phone calling this week, and it turns out there was no way to drop the PMI on our mortgage until we had been paying it for two full years, regardless of how much equity we have. But, we might be able to do a complete refinance with a new appraisal and never have PMI on the new mortgage in the first place. As a bonus, apparently the stock market tanked this week (I haven't followed the stock market since my free-spending days in Texas) and interest rates are at a record low - we can potentially drop 0.5% off our current interest rate, on top of ditching the PMI.

So, we spent the evening applying for a refinance. We had to dig out a lot of the same paperwork we presented for the first mortgage, but at least we knew where most of it was. I'm not sure what the exact timeline is for the appraisal. I should probably figure that out - it wouldn't hurt to get the painting done and everything cleaned up before the appraiser got here. Unlike last time, we're shooting for a high number this time around!

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