As the title suggests, I had a recent adventure in Home Loans/Mortgages! Here is what I learned (not much but still, like to share):
I called about papers I had received in the mail (no not junk ones..from my actual mortgage company). One letter about Home Equity Loans and another about Refinancing. I thought, hmmm..sure would be nice to have a fence in the back yard and redo the kitchen and living room floors! On top of all that, sure would be nice to have a lower rate at that!
I asked could you Refinance, Consolidate AND Receive Home Equity. Answer: Yes you can! We didn't though..we haven't, naturally, lived in our house long enough...a year and a half. Good news is, I am certain our value/equity has increased already by at least 20K-25K. The thing of it was, we just haven't paid down the house enough to receive the benefits of the equity yet.
It wasn't a wasted call...as we did refinance into a lower rate at 5.875 which I think is great. Our payment stayed basically the same but now we are actually paying Principal also. Before we were in a 30 year fixed with a 10 year interest only. Now we are paying basically the same as before $6.00 less (LOL) actually which is fantastic! My cousin did our loan initially and did a fantastic job saving us tons of money and getting us in a bigger nicer house! The mortgage guy I spoke to on the phone last night said my cousin saved us about $300-$400 per month...that translates into a house that is 30K-40K more than we would have otherwise been able to afford! Thanks cousin! :-) My cousin had told us when we got the house a year and a half ago to refinance when the rates dropped again in the future, and the future is now! He was right, AGAIN! So now we are paying (I reiterate) basically the same but now in a normal loan for the long haul! How awesome! I am excited!
Good news! I'm glad to see that you got out of your interest only loan! If the economy stays like it is, the payment would have jumped! I work in the mortgage business and am seeing lots of payments increase to amounts that these homeowners would never be able to afford.
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