January 23, 2004

Headache II: Refinance Boogaloo

And the drama continues! (I realize this makes some people want to curl up and die, but some people seem to find it enthralling, so, here I go.)

I asked the guy about the benefits of paying the costs up front.

Here's what he said:

:::

Paying the $1,950 up front would lower the loan amount to $103,150. The payments are as follows:

15-year: $904.08 (previously $919.38)

20-year: $797.37 (previously $810.65)

30-year: $680.75 (previously $691.83)

The average difference between what you save is $13.22/month. $1,950/$13.22=147.5 months or 12 years. I think it is better to include the $1,950 into the loan amount, because you could invest this amount in something and receive a better rate of return. Plus, you may not be in your house for 12 more years!

:::

That makes zero sense to me. It seems like if I can get the total loan for almost $2000 less with this random extra money I have right now (extra paycheck, tax refund), I should do it! Oh, the confusion.

I mean, barring some unforeseen circumstance, where else would I go?

I love my neighborhood, I love my street, and I love my house. It's in the parish of the school and church where I grew up. Houses are selling for double of what I paid for mine. It's 7 minutes from work. IT IS MY HOOD.

This is calling forth all sorts of teen angst in me. I am almost 29 years old. I am a grown-ass woman. I need to decide this on my own. A lot of people are in the 30-year camp, saying that having the monthly savings would be awesome, and a lot of people are in the 15-year camp and the 20-year camp, saying that clearly I will be saving $1,000,000,000,000 in the long run by shortening the loan and am foolish not to do so if I can pay roughly the same every month.

Everyone's arguments make so much sense that I have no idea which way I'm even leaning at this point.

Then there is the whole reappraisal thing. If my house appraises for more, which it will, won't my hazard insurance and property taxes go up? Will that negate the whole point of this? Like, if I go for the 30 in order to have the monthly savings, will I even have enough monthly savings to make it worth it if I'm paying more in taxes and insurance? And I have these two rooms with nasty-ass carpet that I'm planning to replace with ceramic tile, and should I do that before or after the appraisal? Will that make any difference either way? (I just sent the guy an email rambling about the appraisal questions and he is probably just sitting before his screen, blinking at my blinding neuroses.)

I scare myself.


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