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My Almost-daily Journal |
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| About I love trying out new things, especially when it comes to internet technology. I never really kept a journal, but it's something that I've always wanted to do. Now, everybody will get a chance to look inside my twisted, and somewhat-warped mind.
I've also subscribed to Audio Blog, so a few times a week, I'll leave actual voice blogs. Very cool!XML Newsfeed Previous Posts
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Tuesday, January 20, 2004
Home Refinancing Myths and Urban Legends I'm dumb. Since the interest rate wars of 2002/2003, I didn't refinance my house. I was always under the impression that I would be buying a new house within six months. Every time I considered refinancing, I always thought I was moving. My current interest rate is at a plump 8.125%. Dumb people... I'm extremely prejudiced against them. "No closing costs", "No up-front fees", "Yadda yadda yadda", are typical things I've heard and read from every financial institution. Here's a free public service announcement from dinofilias.com: nothing in life is free, and there are no free lunches in this world. Point to ponder: closing costs and other "fees" associated with paying off your old loan, originating a second loan, title costs, appraisals, etc., are not free. There are several financial sales people out there with the brainpower of adolescent retards. Fact: if you refinance, the costs I mentioned will have to be paid by you, one way or the other. Either you pay for them out of pocket, or the fees get added to your principal. Free, no-cost refinancing is a myth created by dumb people, FOR dumb people. I'm Refinancing I have officially began the steps to refinance my home. I know that I may be moving very soon. Who knows... maybe three months, six months, a year, or a decade. At this point I am unsure. I can't keep this "moving" uncertainty from continuously funnelling money out of my pockets. My current rate of 8.125% is just sickening. I HAD to bite the bullet. Basically, I refinanced for 10 years fixed at 4.875%. The damn rates went up 0.125% this morning. Shit! Oh well. They may still keep going up. They may fall. Rest assured, I will be monitoring 10-year fixed loan rates. So what does this mean? Well, I'll be paying an additional $250/month. Yikes!? Not exactly. The decision was a severe no-brainer. I'll be paying an additional $250/month, but my loan term will be going from 22 years down to 10 years. Sweet! Furthermore, instead of $132 going toward the principal every month, with $700 being thrown away as interest, I'll now be putting $625/month toward the principal with interest being $425/month. So, to sum it up: 1) +$250/month payment 2) +$500/month will be applied toward the principal 3) 12 years will be removed from the loan It's a no-brainer. I can't believe I waited this long. I look at this as free money as in the end, I'll be up $250/month, plus the added bonus of removing 12 years from my loan. Sure, I won't be living in that house for ten more years, but each month, that principal will go down $625/month instead of $132/month. posted by Dino at 1:26 PM (permanent link) |