Refinancing!

Yet another step in the Dave Ramsey process is looking at your current mortgage.  Fortunately, we are well within the 25% limit of what he recommends so we aren't even considering selling our home.  (Your house payment shouldn't be more than 25% of your monthly take home pay.) 

Currently, we are almost 7 years into our 30 year mortgage at a 6.125% interest rate.  That was a very good rate 7 years ago, but now is quite high.  We are refinancing at 3.75% and taking a 15 year fixed which will increase our payment by only about $40 a month.  It's amazing to think that we will shave 8 years off of our mortgage by just refinancing to a lower rate!

Refinancing is not for the faint of heart though!  It's been a long process and even though we're looking at closing in one week, there is still work to be done. 

Our house did not quite appraise for what we had hoped (it was about $10K lower) however, we were happy to find out that we're not "underwater" on it.  ("Underwater" meaning we owe more than it's worth.) 

It costs about $2,500 to close a new mortgage and we are trying to decide just how much of that we want to pay out-of-pocket so we're not borrowing as much over the 15 year period.  It's hard to decide whether to plop down cash or keep it to put toward the debt snowball.  I think the hardest thing is finding time where Aaron and I are available to have an indepth conversation about what we want to do!  It just seems that we are both working non-stop these days.  I guess that's the power of gazelle intensity.  :)