Budgeting Project: Refinancing my House

I meant to post this last month, but totally forgot! I've been working on refinancing my house since October. Every since I attended the Dave Ramsey Smart Conference last year, I've been trying to focus on my Budgeting Project and getting better with spending money.

The process to refinance my house took longer than I expected, but it also went more smoothly than I expected.

When I originally bought my house, I bought it before the market dropped. So I bought "high" AND my house loan was on a 5-year fixed ARM. When the market plummeted, I went quickly under water on my house. I refinanced my house after 2 years to get on a 30-year fixed loan. The ARM loan scared me after the housing market dropped. However, when I refinanced the interest rate wasn't at the lowest.

Once I heard that the Fed would be raising the interest rates, I knew I had to refinance while the rates were still low. So, I jumped right on it.

Since I'm trying to follow the Dave Ramsey plan, they were trying to get me on a 15 year house loan. The problem with the 15 year:

1. It would increase my current mortgage +$200. 
2. I would have to pay out-of-pocket for a house appraisal +$500 

The whole idea around refinancing my house was to save money monthly. It's not like the extra $200 would kill me... but, it defeats the point of trying to pay down my debt. That's money that could go towards my student loans + credit card debt. 

I quickly decided against that. 

Then, we looked into a 20 year house loan. Ran into the same problem. It would still increase my monthly mortgage and I would have to do a house appraisal. 

Now, the interest rate was LOW if I went with the 15- or 20- year house loans. Like, by a lot! But I really do have to focus on getting my debt down, so I opted to forgo these options. 

Then, it was looking at doing another 30 year fixed. The interest rate went down over a point and my monthly mortgage went down over $100/month. I did have some closing costs, some of which I paid out of pocket for, but it wasn't much. 

I expected to get a better interest rate than what I received, but it is what it is!

The paperwork wasn't painless... but it wasn't too crazy. The mortgage company did a lot electronically and I got to sign paperwork electronically as well.

For closing costs, someone came to my home and we signed all the paperwork and I received a CD with the paperwork as well. What was nice is: they printed it on 8.5x10 paper instead of legal paper! Easier filing!

All in all, it took me about 2 months to refinance my house. It would've went faster if I responded quicker to getting some of the requested paperwork. It was relatively painless.

I'm hoping that when I get to the Baby Step #6, I can actually pay off my mortgage. One step at a time though! For now, with the refinance of my house I can put the extra money towards paying off my other debt and continue working on Baby Step #2. Slowly but surely, I hope to make it through these baby steps.

It's almost like I can imagine being at Baby Step #7...! Focus-focus-focus!