We recently refinanced our mortgage and this video is sharing our new mortgage details and how we are now paying much more to our mortgage principal balance each month thanks to the refinance.
Our mortgage payoff journey is having a “restart” with this new mortgage amortization schedule but we’ve gone from 25 years left on our loan to 15 years!
Why I Share Real Mortgage Numbers
People get very strange about money and sharing personal details including what they paid for their home. That has always been strange to me because home purchase prices are public record.
I know what most people paid for their homes because I love to look it up. Your neighbors likely know what you paid for your home because they are invested in property values of your neighborhood. Purchase prices are not a secret.
Despite this, many people still don’t want to share personal information which leaves many to be under prepared when they are buying their first home.
Our Home Mortgage Journey
Related videos on our mortgage payoff journey from where we started with our home loan to our last mortgage payoff update before we refinanced.
Our House Price & Mortgage Details | First Time Home Buyers FHA Loan With Low Downpayment:
2 EASY Ways To Pay Your Mortgage Faster | Our Mortgage Payoff Balance & Monthly Statement:
Refinancing Our FHA Mortgage Loan To Drop PMI:
Last Big Mortgage Payoff Update Before Refinancing| Paying Off Our Mortgage:
That’s a pretty good summary of our first 3.5 years of home ownership! We bought our first home with an FHA loan with very low 3.5% down payment. While we did pay $99 in PMI for those years I think it was worth it to get us to this point where we were able to refinance.
Our new mortgage loan is fantastic and even with that great rate I’d love to pay off our home. There is something very appealing about owning your home in full where no one can take it away from you.
Our New Mortgage Loan Details
If you didn’t watch the video, here are the details of our original mortgage loan.
- 30 year loan
- 3.625% rate
- PMI – $99 per montht
An here are our new mortgage loan details!
- 15 year loan
- 2.75% rate
- NO PMI
Those numbers are so awesome to me! I’m thrilled that I was able to find a refinance offer that made sense for us finally.
I actually spent 3 years trying to get a refinance to make sense numbers wise for our situation. Every time the closing costs were too high or the rate wasn’t low enough to make the refinance worth doing even if we were no longer paying PMI. Holding out for an offer during a different time was a great move and I’m very happy with our new mortgage loan.
How To Know When To Refinance
We refinanced our loan finally in 2020 for a few reasons:
- drop our monthly PMI payment
- get a lower interest rate
- drop from a 30 year to a 15 year loan
- pay off our home faster
- we would break even within a reasonable time frame
Those were the main reasons why we decided to refinance.
If you are considering refinancing your home you need to consider a few different things to decide if it’s worth it in your situation or not.
Here are some things you should consider when refinancing:
- What are your goals with refinancing?
- Can you get a lower interest rate?
- How much money will you save?
- How much are closing costs?
- When will you break even from the cost of refinancing?
Here are some reasons people decide to refinance:
- Switch from an adjustable-rate mortgage to a fixed-rate mortgage
- Drop PMI payment when you hit 20 percent equity in your home
- Switching from a 30 year loan to 15 year loan
- Saving money over time with lower interest rates
As always you should check with professionals you trust who can help you figure out if refinancing would be a good fit for you.
Mortgage Payoff Journey
As I mentioned in my video, I want to pay off our home. We are now scheduled to do it in 15 years but I would like to do it sooner if possible.
I’m planning to do the two similar techniques that I previously used since they really are the easiest ways to pay off your mortgage. It’s paying off your mortgage with zero extra effort or pain thanks to a couple small decisions.
Here are the two easy ways we will be paying off our mortgage:
1. Rounding up our payment.
Our mortgage payment will be rounded up to the nearest even number for our payment. This means each month a certain amount is going directly to pay down the principal of the mortgage. Rounding up doesn’t hurt our budget overall because it is a small amount but it guarantees each month we are sending extra money to pay off our mortgage.
We did this with our original mortgage loan and that allowed us to pay it down faster so we could refinance away from PMI.
It will definitely speed up the payoff process! Rounding up your mortgage payment to the nearest $100 dollar amount makes it an easy and painless way to quickly pay off your mortgage faster.
2. Biweekly mortgage payments.
Next we will also set up our mortgage with biweekly payments to pay off our mortgage faster. This pays off the mortgage faster because you are actually making 26 payments a year but you only need to make 24 to cover the 12 months of mortgage payments. That means the extra 2 biweekly payments are applied to the principal as one FULL PAYMENT extra per year.
On our biweekly schedule we will have a “half payment” go fully toward principal around May and then again later in the year. This adds up to one full payment going straight to paying the mortgage down faster.
Most mortgage servicing companies allow you to set up a biweekly payment plan where you have an extra payment per year which drastically speeds up your repayment of your mortgage. Some will make you pay to do so which often is not worth it but you should check with your mortgage service provider/
Those are a couple of the ways we are paying off our mortgage faster and how much we’ve paid so far!
Mary is the founder of Pennies Not Perfection where she shares her journey to build wealth through online income. She quit her day job in 2021 after she paid off her debt and doubled her 9-5 salary.
Mary's favorite free financial tool is Personal Capital. She uses their free tools to track net worth and work toward to financial freedom.