Explor-a-Mortgage, Part 1

Couple sitting on stone wall outside of house

When was the last time you refinanced your home? Were interest rates lower or higher? If you don’t know, then you should take a look at your mortgage paperwork. It might be totally worth your while!

My interest (pun intended!) in this is very personal. My husband and I refinanced about four years ago, and I had little to do with it. I was going through a very difficult time trying to help manage my parents’ health, so my husband took care of the whole shebang. It was all I could do to show up and sign the papers. Even that stressed me out.

Flash forward to April 2016. Hey, hey! I now work for Linn Area Credit Union, and I’m around money-smart people all day long! So I got this crazy idea that maybe we should look at refinancing again (re-refinancing?), and maybe even rolling our HELOC in with it and doing other crazy-fancy financial stuff. This time I was prepared to take the lead, instead of my husband.

So I had a little sit-down with Larry, one of our top mortgage specialists. Totally cool guy. Brews his own beer, knows oodles about mortgages, and has an awesome sense of humor. (As I like to say, he’s hi-Larry-ous!)

Well, as it turns out, it wasn’t going to work out exactly as I imagined. We couldn’t roll the HELOC into the mortgage because of a little thing called the loan-to-value ratio, aka LTV. Basically, with both the HELOC and the mortgage together, the loan would be higher than 80% of the home’s value. (I didn’t know that was a thing, but, yes, Larry knew it was a thing.)

Larry gave me something else to think about, too. We’ve only got about 12 years left to pay on our home, and when you bundle the closing costs into the mortgage, you raise the amount you owe. In our case, even though we could refinance at a much lower interest rate, in the short term, the savings would be offset by the closing costs.

So the savings would be a wash, unless we commit to this house for the next 10 years. Even though my husband and I have no plans to move, I’m not willing to predict what the next 10 years will bring. Which brought me to a standstill.

Of course, that was in April… flash forward to July!

Right now, Linn Area has a couple of really great special offers that might tip the scales toward refinancing. Because of my earlier chat with Larry, I’m guessing the promotion that offers $250 toward closing costs might not be for me. (It could be perfect for you, though… everyone’s situation is different. Linn Area mortgage specialists will help you figure out what’ll work best!)

Personally, I’m intrigued by the 10 and Done special offer, since I would only have to pay $100 in closing costs. I’ll have to make another appointment with Larry, or one of our other mortgage specialists if he’s not available. (They’re all super-sharp and fun to work with, even if they don’t all homebrew.)

And even though my HELOC-bundling idea didn’t pan out, I really feel like there IS a way for our family to refinance and save some money, especially with the current mortgage offers. If so, I know the Linn Area mortgage team will help me find it!