Refinance … Done!

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We just finalized our refinance on our 6.0% mortgage. As much as we would have liked to go to a 15-year note (per Dave Ramsey’s advice), we felt more comfortable with the 30-year.  Paying down on a 15 year note would obviously save us a ton of interest money and build equity faster, but the savings we gain (about $425/month) will be put to good use.

This is part of HARP and we re-financed with our current lender (a Credit Union).  Overall it was a very smooth process and if you’re in a position where you are underwater in your home, I urge you to look into the program.

Remaining Debts

Yes, I know the blog is titled ‘We got outta debt’, but that’s referring to our non-mortgage debt.

Home Equity Loan (HELl)

We did a cash out HEL(l) loan back in 2007 to consolidate some credit card debt and do some much needed home repairs. (This was before we ‘saw the light’).  We definitely needed the new windows and saw the rising value of the home as a piggy bank.  Lesson learned. That was just before the housing bubble and values went back down.

Primary Mortgage

With our new Refi, we went from the 6.0% to 4.125% 30-year fixed rate.  The $425 a month savings we have will help us accelerate paying off the Equity Loan (by this point you get the HELL idea, right?) by adding it to our 250/month payment.  This means we shave off about 5 years from our payoff.

After we finish with this payoff, we’ll have the chance to continue down the Baby Steps by either adding more to our Retirement account or starting to pay down the Mortgage faster

What about you?  What would you do with an additional $675 per month?

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2 Responses to Refinance … Done!

  1. Numbers would probably say put it in retirement, but I’d split it to get that mortgage paid down faster.

    • outtadebt says:

      As much as I like the idea of no mortgage, ‘Future Me’ probably would appreciate having some money 🙂
      We’ll probably hit the 401k match and add whatever else we can to the mortgage.

      Thanks for the input!

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