The Budget Couple

We are the Budget Couple. We make a bi-weekly podcast that talks about life, family, and how to afford it. Join us on our budgeting journey as we explore the keys to budgeting, personal finance, and more.

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Episode 53: Refinancing the House (again)

Nate and Danielle discuss their reasons for refinancing their house and what it means for the long term. They also talk about their reasons for doing so and what to look out for if you decide to do so as well.

Show Notes

  • Reasons to refinance
    • Shorter payoff period
    • Lower total interest charges
    • Cash out of home
  • Original loan: 25 years left (30 year total), 268K owed, interest rate 3.875% Mortgage payment was $1800 a month
  • New loan: 15 years, 275K owed, interest rate 3.25% New mortgage payment is $2300 a month
    • Total savings in interest is around $50K. Our breakeven point is about 4 years (time it takes to overcome the closing costs)
  • If we took the $275K at 3.875% over 30 years we would pay $465K total for the loan
  • Now we take the same amount at 3.25% and 15 years we pay a total of $348K for the loan, save $117K in interest charges

Lessons learned:

  • Ask questions
  • Push until you get to the interest rate that you want
  • Ask about appraisal and if it might be optional

Updated Goals

  • Pay off house in roughly 10 years
  • To do so we need to average $9000 extra on the house each year
  • Any extra money we are still trying to figure out what we want to do with:
    • Invest it
    • Pay the house off even quicker
    • Something else

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