{ Restructure/Refinance? }

A lot of talk has occurred lately about refinancing and restructuring debt. We have a super decent rate on a 30 year fixed mortgage. However, with the current rates dropping (yesterday's was 4.875%) I ran numbers to see if it would be worth yet, another refinance. (Since we've owned this house it would be the 4th because the rates just dropped year after year after our purchase.) After crunching all the numbers and checking our value on Zillow.com (and deducting $8000 just to be reasonable) to be sure we were still in the 20% equity range, I found we could save $179 a month - or $32,000 over the coarse of the loan - not bad. But we're holding off. Here's why:

• We make an extra mortgage payment each year by adding 1/12 of a payment each month to our mortgage. That brings our actual pay off date to somewhere in the 23 year range - a savings of approximately $92,000.
• We don't want to create a situation where our deduction becomes valueless from a tax standpoint. Lots of people focus so much on the cost of the loan that they don't consider the value to the deduction. We aren't going to be property moguls. This will most likely be our only property investment and we still have our largest earning years ahead of us (hopefully). We need all the deductions we can get.
• Due to points on the loan, it would make the $179 savings irrelevant for 2 years. We could pay cash during closing but our short term (9 months) of savings isn't even to the half way point and I'm not willing to dip into that yet.
• Finally, when I crunched the numbers and thought about $179 a month I realized that we could save that much right now by restructuring our current budget.

So, for now, we wait and see if the rates drop lower than 4.5% That would worth a second look.
Tomorrow's list:
Client work, garden work, haircut

p.s. Thank you Lisa from Vermont for you good wishes on my surgery! I will have only one night in the hospital and a two week recovery if all goes according to plan. Should have lots of blogging time on the couch, though! Hope your weather turns sunny soon!