We have debated until we were blue about refinancing KNOWING our goal is to have the house paid off in 3 yrs (no more than 8).
We talked to both our finance guys and two bankers and our mortgage guy. All felt with the interest rate at half our currant rate, that we should for the following reasons.... FHA keeps the PMI (mortgage ins.) on until the loan is paid off instead of the 22 % like other loans. That is $2000 plus a year. IF something were to happen and we couldn't pay off the loan... we would be better off with a lower rate and lower payment. Since it is a home loan topped with a construction loan changing it to a home loan only will help if we ever had to borrow against it. We have equity but not 20% unless the appraisal comes in higher than what it was 2 yrs and 9 months ago.
Which means the appraisal would have to come in at no lower than $325,000. I don't think it's raised that much but we will see.
We refinanced through the same company that is holding the mortgage now. Closing costs were cut in half, interest was the best also and the escrow acct is transferred to the new loan immediately so we don't have to come up with the ins payment and taxes that are due in July when the loan will go through like we would have if we went some where else and then wait for that acct to refund to us.
The house was sold as a 2 bedroom. If I get it done this week it should list at least as a 4 bedroom if not 5.
The mortgage will drop $500/ month. I already know the ins will raise $50/ month and the takes will $100/month. So that "extra" $350 can go on the principal each month.
Back to work.