Thursday, December 10, 2009

Refinancing Conundrum

We're in the process of having our house refinanced. Doing so would lower our payments about $100 a month and the Magic 8 ball said it would be a good move.

Right now we're in the midst of the appraisal stage. As everyone and their hermit knows home values have dropped since we bought the house nearly five years ago. However we got a very good deal and paid 20% down (to avoid that pesky PMI) and we've been paying a bit extra each month on the principle and home values in our area have been fairly stable so I wasn't concerned.

I should have been.

The appraiser, who spent an unusually long amount of time jockeying her SUV around to get into our driveway, valued the house at $10,000 less than we paid for it. Because there hasn't been much sales activity in our neighborhood in the last she for comparision she used a house two blocks away and two houses FOUR MILES AWAY. HUH? It's not like we live in the country... we're in the city so four miles could be just about anywhere. In this case it was near Rudisill. I mean no disrespect to those living in the Rudisill area and there are many fine, well built, older houses like ours but it's well known that the area is a bit on the urban side. Home values traditionally are quite a bit lower in that part of town so naturally our value got dinged. Seems a bit of common sense would prevail, eh? So its time to file a review / complaint / whatever to see if this can be changed. I've been told not to expect much.

Which would mean having to pay a nice chunk of change at closing NEXT WEEK in order to avoid those nasty PMI fees. We don't have to pay a mortgage payment in January so the amount we need is quite close to our monthly mortgage payment. If closing was in three weeks it'd be no sweat, just take Mortgage Payment A and apply it to Mortgage Prepayment B and everyone is happy. So now I'm looking for a rich uncle to lend me a thousand bucks for two weeks.

The good news is that I can take this OFFICIAL APPRAISAL to the county tax officials and have our taxes adjusted. They only have it inflated by $50,000 or so meaning that in addition to saving money on the mortgage we should also start paying less in property taxes.

What to do with all this money we'll be saving? How about maternity and baby clothes! OH YEAH!


Elephantschild said...

We did a refi within the past year. We were able to go from a 30 yr mortgage to a 15 year with a $75 payment increase each month. It hurts, I tell you. I keep telling myself that 15 years from now we'll be SO GLAD we did it.

But our appraiser had a dickens of a time finding comps. He ended up pulling comps of houses that were quite a bit different than ours, simply because there wasn't anything else!

Big Doofus (Roger) said...

We're doing the refi, too. I got a great deal online. Some guy name, Al is doing the whole thing and promised me a great rate. I gave him all of our information via email and I'm still waiting to hear from him.

But seriously, we ARE in the process and just had the appraisal performed the other day. I've heard similar horror stories so I'll be very interested in how ours goes. I hear that if you have an alpaca chained to your light post it's worth an extra $20K on the value of your house.

Uvulapie said...

The low valuation of our house stands but I didn't have to pay the insurance because we were so gosh darned close! This week or next I shall petition the tax office to lower the property taxes of their humble serf.

Big Doofus (Roger) said...

We actually got GOOD news on our appraisal and the refi is going to happen. We went from a 5.675 30-year mortgage to a 4.375 15-year mortgage and it's only $100/month more than we pay now. The only stipulation was that the bank's branch manager gets to live in our basement with his collection of rare owls.

Uvulapie said...

That is super news
Pay off THE MAN super fast
Then stock up on Pez.