We refinanced our mortgage!
June 6, 2016
Last year, we managed a tidy prepayment on the mortgage and I was hooked on the taste of paying it DOWN.
After more than five months of painful paperwork and terrible service, we finally refinanced our dang mortgage!
I shopped rates on BankRate, with Quicken Loans, Bank of America, Chase, Citi, SoFi.
The lowest possible rate offered was on a 30-year 7/1 ARM at SoFi. My internal conflict raged: a very low interest rate equals big savings and a huge increase in cash flow. But an ARM? I’m a low-to-moderate risktaker and at first, the idea that the rate increase could spike to nearly 8% in Year 8, while symmetrical, is risk that I wasn’t sure I wanted. Partly because of my love for maximum savings, I was 80% sure that the ARM was the right way to go and 20% an irrational worrywart because of the high ceiling on the allowed rate increase.
Cut to a scene of me doing calculations on ARMs vs fixed rates like a squirrel hopped up on an illicit stash of nuts.
The math showed that I was right. Even if we only paid the new, low, monthly payment for the next 7 years, in the worst case scenario of the interest increasing to 7.5%, the monthly payment would still be a couple hundred dollars less than what we pay now. In the meantime, our new monthly payment would be under $1000 per month and the interest rate? Under 3%.
A review of SoFi Mortgage
Hands down terrible. Absolutely NOT RECOMMENDED.
StackingPennies had described her experience refinancing her student loans with Earnest: “It was very much a Silicon Valley company designed for millennial who can’t stand bad web design, inefficient processes, or too many phone calls.” SoFi and Earnest are competitors in the same market so I assumed they’d be competitive. I also gave them a shot because several friends had praised them for their student loan refinances.
My experience with them? Awful. No good. Very Bad. I had a better time of it when I bought our investment property with a long distance broker and a traditional lender. They were the total opposite of what I expected.
I asked them to conduct everything by email because I needed everything in writing and my work doesn’t allow for me to stop for phone calls. It took three phone calls and three weeks to get them to comply with this one request. Meanwhile, they kept badgering PiC by phone. Why? I don’t even know.
Their email communication was like risque summer wear: barely there, and totally unprofessional when it did show up.
One of the weeks when we were in contact, we exchanged more than 20 emails because the assistant couldn’t possibly manage to ask me for a complete list of required documents. She had to ask for nearly 20 documents across 7 emails. You’d think she was being paid by email volume. The rest of the time, she was so unclear in her terminology I had no idea what she was asking for. Then she couldn’t possibly make sure that all the files she requested had a home for upload on the submission site. Then the submission site was a total jerk and would eat some of the files that I uploaded.
They kept getting important details wrong, and giving me important information too late. They’d send random clutches of documents for signatures without any explanation. Without fail, they’d ask me for documentation at absolutely the latest possible time to ask and then rush me to supply it. As if I don’t have a full time job, by virtue of which I qualify for the dang loan, and just sit here chewing on my nails, nervously awaiting the next email to fulfill their desires.
Can I remind you that it took nearly half a year to complete this? My last mortgage took less than 20 days to finalize from the point of agreement with the buyer to closing.
It’s like the alien wearing Edgar in Men in Black II. They superficially look like a modern, tech-savvy, version of a mortgage company but the skin barely covers up the fact they are really not human.
Go figure – when I shared my frustrations with some friends, half a dozen told me that they hated SoFi’s mortgage side too. Every complaint I had was echoed, and in some cases, they definitely had it worse. A few of them abandoned ship when they were in their 4th month. I can’t blame them.
The end result
It’s OVER. If I’m lucky, if I work these cards right, the next time I have to talk to them is when we pay off the loan. Wait, I’d better not have to talk to them then. Just send me that dang title.
Our mortgage is now a sane amount.
I’m happy the refinance is concluded but that took so long, I’m ready for the next phase already. Which is what?
Now I take advantage of our extra cash flow to pay down the mortgage even more! My goal is to throw at least $70K in extra payments at the loan over the next 7 years, assuming stable income over that time.
If we manage that, we’ll be within $100,000 of payoff.
There remains the question of whether we might attempt to buy a larger home during that time. We’d both really like a bit more room but it doesn’t feel realistic. I stalk the market monthly. The prices just keep going up, and quality isn’t in line with the cost. We can’t find anything that gives us enough space to warrant a move but also isn’t a dump for under $1.5M. I don’t yet see where I make room in our current budget to save 40-60% of a greater than $1M amount in less than 7 years. (I refuse to take out a jumbo loan.)
I’m also unsure I want to start over with a new mortgage – we’ll be so close to paying this one off! I’d love to be mortgage free and stay that way. Contrast that against my love of more dogs and hope for more space (but not too much) … I’m not sure yet which will win out.
:: Do you have an ARM or a fixed-rate mortgage, or no mortgage at all? What’s your dream home goal? Are you a someday owner or a forever renter?