June 6, 2016
Last year, we managed a tidy prepayment on the mortgage and I was hooked on the taste of paying it DOWN.
DRUMROLL PLEASE
After more than five months of painful paperwork and terrible service, we finally refinanced our dang mortgage!
The process
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?
February 3, 2009
The truck sold. What’s next?
Well, I’m pretty sure that the sale price didn’t come close to breaking even against the amount of money I’ve expended on the truck payments since last July, I’m not even checking, but it did cover the lump pay-off sum of $2356, with some cash to spare.
The question is: what do I do with that “extra” money?
My first reaction was to kick that money over to pay off the family car. It’s just about the right amount to pay it off, and would remove one more loan from the family resources. (That car is currently my parents’ responsibility, and not under my name.) It would free up cash flow about 7 months earlier than expected.
My second reaction was to put it in the emergency fund because I’m neurotically squirreling money away.
My third reaction was to leave it in the expenses fund because that’s where the money came from in the first place, and I’m a BIG fan of paying myself back.
Lastly, there’s a hybrid option. I could give them some partial assistance monthly, depending on how much they need to break even between my mom’s (piddling) disability money and my dad’s erratic income. By my calculations, it appears that they should only be running short a hundred or so each month until April. At that time, another monthly obligation falls off the balance sheet, and they should be fine with regards to the few debts I don’t pay for them.
As much as my gut reaction is just to pay it all off, I don’t want to nip this budding sense of responsibility that my dad’s developing. I want to encourage him to work with me because I’m just not up for ANY more shenanigans.
Thoughts?
November 27, 2008
Is it really Thanksgiving? Happy Thanksgiving, all!
I took to my bed on Tuesday evening, and have only just emerged for a short spell today as my fatigue permits. This is the first time I’ve really been able to form cohesive thought in any sort of linear pattern. Mutant virus, indeed! Whatever this is, it hasn’t let up its grip so I’ll likely pass on all but the most superficial examinations of the Black Friday ads. (Except for the laptop sales, friend keeps calling me with new updates and I can’t resist peeking, at least. But do I really have $600 to spend right now? Before tax? It’s not an impressive bargain but the machine is really quite nice and it’s not likely I’ll have a better deal popping up before next Turkey Day. Well, that’s a debate I haven’t the energy for, and pretty soon it’ll be a moot point.)
I did manage, however, to pay a couple bills and get the CarMax estimate from my dad who took the truck in for the appraisal for me. It’s nothing outstanding, of course, and I’d expected a low amount but actually seeing the appraisal come in at a cold $3000 still took my breath away, a bit. Wow. That little? *shaking head* I’d allowed for the probability. And knew it was likely. That amount will neatly clear the loan with a tenner to spare, or something like that. It may not even be worth the effort of taking it to the dealer for a buyback estimate, but that’ll only cost time, right? If I can muster the energy to leave the house by Saturday, it’d be lovely to have the truck issue resolved.
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A few articles I’ve enjoyed in brief moments of lucidity:
Guest post by Living Almost Large at Clever Dude‘s on Thinking Poor?: it’s definitely a mentality that I’ve been weaning myself off to focus on achieving goals and a positive perspective.
Guest post by Jim of Blueprint for Financial Prosperity, also at Clever Dude‘s on Emergency Funds: Don’t know why I never get tired of thinking about emergency funds. Comforting to know it’s there? Just a couple weeks ago I debated creating a CD ladder, but committed to a single, smallish CD to help offset the lowered interest rates on my “high-yield” savings accounts.
I also liked LAL’s post on Moving for a Job: she asks questions that are very important to consider in the course of making that decision.
Frugal is running a fun little series on blogging about PF. Yep, very meta, she’s PF blogging about PF blogging. In Part 2 she asks about the spender/saver split and where her readers fall on either side of the divide. I think we’ve collectively built a bridge, myself!
Clever Dude’s co-author, Shawn, talked about his experience grooming his elderly, thick-coated dog. I had to laugh because my elderly, thick-coated dog has had to endure some similar bad-hair summers thanks to my adolescent enthusiasm and certainty that she’d rather be cool and comfortable, if a little weird looking. Turns out, she’d rather be overheated and not embarrassingly poorly groomed. Unfortunately for her, I really do enjoy the hands-on grooming, shampooing and all of my pets, so even though I won’t try to clip her coat ever again, she still gets bathed at home.
The NY Times runs an article on the New Medicaid rule that would allow states to charge premiums and higher co-payments for services and goods previously provided at no cost (I think) to low-income people. I can understand that states would need to recoup some of the cost of care in order to continue providing it, but I can also see how even nominal fees would become prohibitive. That latter point is actually what proponents consider a bonus, that people would use the services less and reduce the burden of cost and thereby freeing up the services for a greater population, but it’s also a rather cold, bottom line point of view. I can’t argue that it makes economic sense, it just can’t take the premier place in the consideration of how to address the problem.
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And I’m exhausted again, so off I go! Hope everyone has a wonderful holiday weekend!
April 4, 2008
Readers, please head over to MoneyDummy’s and laud her for an amazing job of paying off her student loan debt over the last year and a half. She (and he) managed to pay off eighteen thousand dollars with one child in the home and a new one during that time.
What an incredible accomplishment!
January 2, 2008
I had to use 25,000 miles for BD’s short haul flight the weekend of the wedding that would normally only “cost” 15,000 miles, but the trade-off is almost $200 that BD can put towards paying down his debt, so it’s worth it.
Ya hear that, BD? $196 —> debt repayment! 🙂
(Just kidding, he doesn’t actually read this.)