We have been working on our refinance for about 6 months now. It has been a very frustrating time for both my wife and I. There hasn’t been a simple problem, only tough ones, ranging from not having the title to our house, to not enough comparable sales for our appraisal to be approved. The former being something that we could handle and the latter being completely out of our control. Along the way we have felt frustration, hope, more frustration, excitement and last but not least, failure.
Last Friday I called our mortgage officer. Feb 27th was supposed to be our last day of the lock-in period. I knew he was going to extend it by a week because we were waiting on one more sale to go through, and see if the underwriters would approve that sale as a comparable. So last monday that sale closed, the one we were waiting on for the underwriters to approve our appraisal, which was the last step before closing. The underwriters decided to decline that sale as a comparable. Pretty much stopping our refinance from happening.
The refi is on the back-burner for now, so that leaves us with some options on other stuff. We had money saved up about 9k to pay down our mortgage to get a VA loan, so now we have to decide what we want to do with that money. Here are some options.
- Still pay down the mortgage, about $8400 to get it down to the original appraisal’s 20% equity and get rid of PMI, saving $106/month plus the interest savings over the life of the loan. This would also let us get a later refi without putting any more $ down.
- Pay off the camper, about $7500, saving $236/month.
- Pay off Student loan, about $3900, saving $70/month.
- Keep the money in savings.
- Buy a brand new motocross bike?
I think the best route to go here is to put it towards the mortgage. Over the long run I think it’s the best option to go with. We would still have the other loans, but the goal of paying those off by years end is still the goal considering we had earmarked that money for the mortgage pay down. Our mortgage officer told us that another option for us is to wait until the more active selling season (summertime) is over, talk to some real estate agents and see how sales were with houses that are comparable to ours and then reapply for the refinance. I think that by going with the 1st option, we would already have the mortgage paid down far enough to not put any extra down if we were able to refi in the fall. The camper and student loan would still be there for a while but will still be paid off by years end.
As frustrating as this whole refinance has been, I am trying to take some good from it.
- We have the title in our name now.
- Our savings rate has increased by cutting back on other stuff.
- We now have a plan to attack our debt.
Which option do you think is best and why? Can you think of other options that I might have?