First time home refinancing expectations

We are currently undergoing our first refinance, and have been learning as we go. We are a little late to the game, and not capturing the best rate we could have … reason being is that we were on the verge of moving when the rates bottomed out. Our local housing market in the price range and location we are looking at, is going as high as $120,000 over list price and that’s a game we are not interested in playing right now.

Instead, we’ve decided to continue to build up equity in our current home and capture increased cashflow to use for investment acceleration. We have a great location in our current home, and it’s appreciating at 8%+ YoY for the past 3 years, so we are sticking it out with what we believe the safest play in the current environment.

Given that we’re currently going through this process, I wanted to share things you need to know doing a first time home refinance.

 

Tips for your first home refinance

  1. Personally reach out to your current lender and ask what their current rates are
  2. Understand credits vs points
  3. Shop lenders, and negotiate with them based on offers you receive
  4. Expect the numbers to change after you rate lock

When we sat down and did the math, we free up ~$300-$400 a month in cash flow, and have a break even time of cash out of pocket for 2 years. We can then use that extra cashflow to put into other investments or investment in moments with the family.

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