It’s been a year since we refinanced our home from 6.25 percent to 4.875 percent.
And while the moved saved us about $200 a month (and about $100,000 in interest over the course of our mortgage), I must admit that we haven’t really felt much of a difference in our budget.
When we first finished our mortgage refinancing, my husband I spent a lot of time talking about what we could do with the extra money in our budget.
In the end, we opted to dedicate $100 a month to paying extra on the principal of our mortgage. This was something we had done in the past, but gave up when our twins were newborns ($100 a month buys a lot of diapers!). By putting the money toward the principal, we’ll shave about 7 years off our mortgage, and it was relatlively painless since we hadn’t gotten used to having the extra money from the re-fi.
As for the other $100 a month, it got absorbed by increases in our living costs. Utility bills, fuel for our vehicles, and higher health insurance premiums all chipped away at the remaining “extra” money we found by refinancing our mortgage.
Despite the fact that our financial situation doesn’t really feel different since we refinanced our home, I know that it was a positive move for us, and one I’m glad we made.
Did you refinance your home in the past year? Has it helped your budget?