The following blog was originally posted in the morning of Wednesday, January 16, 2013. But I eventually pulled it offline that evening due to an unexpected turn of events. Here is the original post:
Happy New Year to us!
Signed, sealed and money will be saved! That's because we just signed closing documents to refinance our home mortgage and we are set to save over $400 per month. This monthly saving is a lot more than we had originally hoped for, due in large part to good timing and sheer luck.
When we first started the process of refinancing, we were looking for an appraisal value of $X to get an interest rate of 3.875% at no cost no fee. If our appraisal came back lower than that, we would've had to pay a fee of $1500 to get the rate. The appraisal was done on 12/18/2012 but due to the holidays, the final report did not come out until 1/2/2013. Our minds were blown away when we saw our home’s appraised value. It was $60k more than we had hoped. This value was, in our minds, unreachable when we first started looking into refinancing. But because two houses near us had just sold for way over asking price, the value of our house shot up with their selling prices. Thus, the timing of our appraisal happening just after those houses had sold helped us tremendously.
After seeing our ridiculously high appraisal, we asked our loan agent Tracie if it wasn’t too late to pursue a lower rate. Sure enough, we were allowed to go with another type of refinancing program with the same lender that offered a lower rate of 3.625%, still at no point no fee and without having to do any additional paperwork. Of course we asked to switch to that program and then patiently awaited documents to sign.
A week later, as the documents were being prepared, Tracie’s company was named the 2013 premiere broker for this lender and was offered to pass on certain incentives to a few select customers. Tracie selected us to pass on the incentive of a 0.125% interest rate discount plus a cash bonus. In essence, the timing of our refinance happening during the holidays and having been pushed into the New Year had brought us not only a lower rate but also a cash bonus. That is the beauty of good timing and sheer luck!
Now, after more than a month and spanning two calendar years from start to finish, we successfully refinanced our home mortgage to 3.5% (that’s 1.375% lower than our current rate) plus a cash bonus large enough to cover the Feb 2013 installment of our property tax. That’s quite a Happy New Year gift to us!
So I thought our signing of the loan documents meant the deal was sealed and our part was done. But I was wrong. The day after we signed the documents, our loan agent called to relay an inquiry from the lender, one that they evidently neglected to clarify BEFORE approving our loan. Long story short, it took another week after we signed the documents to clarify their inquiry to their satisfaction and ultimately the last steps to close our loan were taken on January 23rd. Fortunately this hindsight of theirs did not cost us our loan. Again, luck was on our side that our rate was locked late in the process and was in effect for another 2 weeks before the closing absolutely had to take place. Nevertheless, because they didn't dot their I's or crossed their T's before they approved the loan only to come back later with more hoops for us to jump through, we were stressed out that last week before the loan finally closed. Some people complain refinancing is too much hassle. If our savings wasn't that big with this refinance I may have agreed.
