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Slashing My Expenses Even More Via a Home Refinance

Home Refinance-In the pursuit to slash my monthly expenses even more, I decided to attempt to refinance my existing primary home mortgage. Through Pentagon Federal Credit Union, I am attempting a 5/5 Adjustable Rate Mortgage. The positives of this mortgage is that pretty much all closing costs are paid by Penfed. It will also drop my interest rate from 4.0% to 3.0%, which will save me about $80 per month on my $97,7000 mortgage when I refinance into a new 30 year mortgage.

The other great news is that Penfed doesn’t require an escrow account. Even though escrow accounts are used to make sure that taxes and home owner’s insurance policies are paid, I’d rather keep the $150 from inflating my mortgage payment. I can easily take from my savings and pay the $2000 or so once per year whiling marveling at the idea that my monthly payments dropped by almost $250 per month.

I don’t expect anything going wrong with the loan. I have a reasonably high credit rating and a sufficient amount of money saved.

The only “bad” thing is that if I decide to pay off my home in full before 36 months after the loan begins, I’d have to pay a prorated amount of the closing costs that will be paid by Penfed. No biggie, since the closing costs are only estimated as $2500.  Oh, and what sucks is that the day after I locked in the rate of 3.0%, the rate dropped again to 2.875%. Oh, well.

Either way, I’m pretty excited to drop my monthly payments even more. The more I can save on my monthly expenses, the more I can save towards my eventual retirement. The only thing that sucks is that I’m getting all of this paperwork ready two days before taking off to a foreign country for the next 10 days.

Wish me luck!




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