Over the past twelve years my husband and I have applied for home loans nine separate times. Does that seem slightly insane to anyone other than me?
Our primary home was purchased in 2001 for $260,000. Here are the details for the original loan and each refinance that followed.
| Date | Loan Amount | Term | Rate | Note |
| 2001 | $247,000 | 30 Years | 6.875% | Original Loan (included crappy PMI) |
| 2002 | $243,000 | 30 Years | 6.000% | Removed PMI |
| 2003 | $237,700 | 15 Years | 4.875% | Lower Rate & Term |
| 2009 | $400,000 | 15 Years | 4.500% | Cash Out to Buy Additional Property |
| 2012 | $335,000 | 10 Years | 3.125% | Lower Rate & Term |
Our second home was purchased in 2005 for $620,000. Here are the details for that loan and each refinance that followed.
| Date | Loan Amount | Term | Rate | Note |
| 2005 | $496,000 | 30 Years | 6.000% | Original Loan |
| 2008 | $443,000 | 30 Years | 5.000% | Lower Rate |
| 2009 | $376,000 | 15 Years | 4.500% | Lower Rate & Term |
| 2012 | $325,000 | 10 Years | 3.500% | Lower Rate & Term |
As you can see each and every one of our loans seemed to make sense at the time. We refinanced as interest rates fell and tried as often as possible to lower the term of the mortgage.
The exception to that rule came in 2009 when we applied for and accepted a cash out refinance in order to purchase a third property free and clear. We actually planned to take out a mortgage on the third property, but were low balled by a low appraisal. Without any other means to fund the purchase we decided to cash out our primary residence. In the end it was actually a better alternative as rates on primary homes are typically at least 50 basis points lower then they are on second homes and investment properties.
I will admit that it was quite difficult to watch the loan amount jump up to $400,000. Although it was worth it to buy the investment property the principal on our home was less than $180,000 at that time.
As you can see if we had been a bit more patient with interest rates we may have been able to hold out on refinancing our second property in 2008. Interest rates continued to fall and we refinanced again just over one year later.
Crazy enough interest rates have fallen even further since we refinanced last year. I remember shaking my head in disbelief as I signed a mortgage for 3.125%. These days I could get the same mortgage for 2.875%.
Believe it or not I considered refinancing again, but the numbers just don’t add up. With a 10 year term and such a small drop in rates we’d only save a few thousand dollars over the life of the loan. By the time you stack on closing costs it’s certainly not worth it. Still I would love to say I had an interest rate of less than 3%.
I can’t believe how many times we refinanced these two properties. Refinancing is not easy work and it’s crazy to think about how many times we applied for loans, gathered up all of the required documents and met with notaries to sign documents.
I like to think that we would never refinance these properties again. Even if these two homes are paid off in the next nine years I’m not certain that we are finished with mortgages. My husband wants to build a vacation property, which means another home loan will exist for us in the not so distant future.
Wow! I have refinanced 3 times in 10 years. My current rate is 2.62%. Did you pay closing costs for each refi? For my first refi, I paid about $2,500 in closing costs(this was 9 years ago). My 2nd and 3rd refis were with INGDirect (now Capital One) and those closing costs were much cheaper – about $1,000 for each one.
Unfortunately we did pay closing costs each time, but it was still worth it to receive the lower rate. I also found that refinancing in North Carolina is much cheaper than it is in our home state of Maryland.
Yes, some States are cheaper. I live in NJ and it is cheaper than NY. My co-worker who lives in NYC decided not to refinance due to the $9,000 closing cost fee.
Wow! That does seem like a lot of refis in that time period, but good for you for taking advantage of the falling interest rates. As long as your worked out the math and figured it was worth the closing costs and paperwork, what you did was sane and smart. Thanks for posting your refi history–very interesting to see.
I’ve owned 1 home since 2010 and I’ve already refi’d twice. But both refis were absolutely no closing costs (not even 3rd party closing costs). Right now we are at 3.5% 30 year fixed conforming loan (under $417k). We found that we can get 3.375% 30 year fixed with no closing costs. If it goes to 3.25% then we would definitely do it again.