Back story on the article below.  I have been given my own column in Houston Woman Magazine.  At first, I thought the nice magazine people were wanting my expertise on mortgages, because, you know, I work for a mortgage company.  So I wrote the piece below and submitted for my second column (the first column is where I introduced myself to the fine women of Houston and gave them to opportunity to fall in love with me). 

Well, turns out the nice magazine people just want me to write about regular ole assistant life and not so much concerning my jaw-dropping plethora of mortgage facts.  That said, you all get a free look at my denied submission.  Since writing the piece, I wrote another Just the Assistant article that was more along the lines of what they were looking for.  You can check it out in next month’s Houston Woman (you can subscribe to the magazine on their website).

More back/front story.  The piece mentions a friend of mine who refinanced her home years ago.  Well, she is now looking into it again with my bosses because rates are even lower.  Enjoy! 

The Company You Keep

Before I started working for my bosses, I thought refinances were what shady crooks secured to pay off bookies.  Okay, actually, I thought any refinances other than the type I planned to get were what shady crooks secured to pay off bookies.

Here’s the thing.  Several years ago, I decided to refinance my mortgage from a thirty year to a fifteen year loan –i.e., the morally superior kind of refinancing.  I was going through a financially self-righteous phase and this refinance fit in perfectly.  I bragged about my savvy plans to a girlfriend as we ran laps around Memorial Park.  She mentioned that she knew a great mortgage banker who had helped her refinance her own home.  She also mentioned she had kept her same loan term of thirty years. 

I glared at her.  I thought I knew you…  I likened her type of refinancing to hawking your great-grandma’s wedding band to pay down a rent-to-own furniture credit card debt: just plain wrong.  I pressed her for details. “What do you mean you kept the loan at thirty years?  What’s the point of that?”  She patiently explained why it was a wise decision, and passed along the mortgage guy’s information.

Alright, let’s break this down.  A refinance means you get a new home loan that will pay off your current one.  And some aspect of this new mortgage saves you money.  In my case, it saved me money because I planned to aggressively pay off my home, and a fifteen year mortgage provided me with a lower interest rate than the previous thirty year loan.

In my girlfriend’s case, her new loan was for the same number of years, but interest rates had dropped since she’d purchased her house a few years prior, so her new mortgage had a significantly lower monthly payment.  At that point, she had the option of putting the savings right back into the loan each month, thus paying it off even faster; or she could pocket the cash (or use it to pay tuition, buy an investment property, fix up her house, whatever).  Either way, it was a really smart move on her part.  And yes, I apologized profusely for accusing her of crime ring involvement.

After that day at the park, I emailed my friend’s mortgage guy.  He kindly answered every single question I threw at him and provided me with a lovely refinance. Oh, and at the closing table a month later, he hired me as his assistant.  I’m fairly certain he mistook my glow from saving so much money as a genuine love of the mortgage industry. 

Once I started working for my bosses, I learned more of the details involved in refinancing.  First of all, finding out if it makes financial sense for you to refinance is free.  My bosses run numbers for people every day.  And the way a mortgage banker will break the numbers down will make it obvious if it’s a smart step for you or not.  A good mortgage banker will show you how much everything will cost, how much you will or won’t save each month, and the exact date that you will break even considering the costs associated with the loan.  It will be easy to say, “Oh look, I can save eighteen cents.  No, thank you,” or “What!?  I can save a hundred and six dollars every month and break even in less than a year?  Cha-ching!”

With interest rates still being low right now, I’d recommend everyone at least review the numbers.  How else are you going to pay off that bookie, hmm?