We just closed on our refinance today. God willing everything will be in order in the next month or so. We got a 4.125% interest rate for 30 years.
The closing costs with all the taxes and fees and everything else came out to be about 6k. Although they say we should be getting 2k back from escrow because of random taxes and insurance they had to collect up front.
In any case, our new mortgage is $1070 or $344 less per month. Incredible. We actually paid down over 40k + 30k in renovations. So in effect we have put over 70k into this house. But it's good.
We like it and we like how manageable this new mortgage is. We have been owners of this house for almost 2 years now. Bought in Dec 2008 and will probably stay here for another 2 years just so we make back what we lost through this refinance. $6000 divided by our $344 savings is 17.5 months or about one and a half years. Not bad.
On the horizon: we have been actually contemplating renting out this house. With a mortgage of $1070 and the going rental rate going between 1500-1700 we could actually make a decent cashflow. But we will definitely need to examine who rents this place.
This townhouse is old, so there is still stuff that needs fixing especially electrical, plumbing, and other minor stuff that may be annoying to renters.
This reduces our housing costs to less than 25% of total income. Definitely a huge boost in our budget.
What can a budget do for you?