I posted about a month ago stating that my wife and I set a goal that by the end of the year we would refinance into a conventional loan. We've been in an FHA loan where we pay $215/month in PMI on top of the mortgage payment. To do this you must have 5% equity in your home, and based on Zillow we weren't even close. We figured we would have to bring about $40,000 to the table to do this. We saved the $40k and proceeded to get an appraisal. To our delight the appraisal came in about $35k more than Zillow has it for! This means we only have to bring $11,000 to the table.
So in the last year we went from:
8/15/2010 Original FHA loan: $223k @ 5.25% plus PMI = $1800 payment with escrow taxes
10/10/2012 FHA loan: $209k @ 3.55% Plus PMI = $1660 payment with escrow taxes
3/8/2013 New Conventional 15 YEAR Loan: $199k @ 3.25% with NO PMI. = $1800 payment with escrow taxes
So our payment is what it was originally, but we're now in a 15 year loan instead of a 30-year. I'm motivated to pay down the loan very quickly but it seems like that's a bad idea when the interest is only 3.25%.
There's just something to be said about paying off your home rather than having a higher number in the 401k.
Anyways I thought I'd share our badassity since this was a huge goal of ours that we thought we wouldn't be able to do until mid-summer. With the leftover money I think we'll fund our Roth IRA's for 2013.
-Ryan