Monday, August 26, 2013

Refinancing my Home

When it comes to important matters I am always scared to make change, why fix something if it isn't broken.  One thing topic that would always get me thinking was refinance.  My parents down't own their home, and we do not have any other relatives that I can ask about this here in the states.  So I started to pick the brains of my friends and co-workers.

I was the first to buy a home in our family.  That was scary.  My co-worker who had turn real estate agent actually help me.  I didn't know anything other than where I wanted to live.  See there was a new sub-division being built by my mom's rental home, the day care my son use to go to, and all things familiar to me.  I had told myself, when they start building here, this is where I want my home to be.  One day after church I saw they had broken ground and were starting to build.  I was so happy.  I went in and boom-the house, my house, started to get built.  We drove by the lot and we watched it be built.  I picked every detail that I was allowed.  Being a newbie, I didn't know I could have made better choices or more decision.  I jumped in head first.  I was a first time buyer, and did not have good credit.  NEVER LET YOUR FRIENDS USE YOUR CREDIT/CREDIT CARDS, etc...  Luckily at the time I went in, Bank of America was working with first time buyers.  They did everything in their power to get me into my house.  I had to pay offs some cards, and fix some of my credit in the 3 months that my house was being built.  All the way to the last minute of signing, we moved forward but my loan had yet to be approved.  The house was built, and the day to close came.  The bank was still filing paperwork but everything got approved.  I signed on the dotted lines, pages and pages of paperwork.  I was so excited that I went with it.  I received the keys to my new home and finally became a HOME OWNER!!!  Remember, I was a single parent living on a single parent budget working 3 jobs at times.  I thank my mother for all her help during this transition without her I could not have done it.

Fast forward to this day.  I have been living in my home for over 7 years now.  I am now married.  Interest rates are at an all time low is what the commercial say.  But I have always been scared to mess with anything for my house, make a mistake, and then lose my house because of it.  But more and more people around me were talking about it, so I started asking questions.  Also, my husband is military and USAA has great insurance.  We financed our truck through them because they offered lowest interest rate compared to the bank and credit union.  So we decided to call them for a quote.  I also called around to the banks, credit union and even the current loan holder.  Turns out I could save money, because my interest rate would be cut in half.  My current loan was set for 30 years.  I have always talked about wanting to have my house paid for in 15 years or sooner.  With this economy planning for the future is very important to me.  So we decided that it would be in our best interest to refinance.  We started this process and I learn so much that I felt I had to share the knowledge or my experience at the least.

-Do you know your credit score?

I didn't care because I wasn't making any big purchases.

-Did you know you can get a free credit report, every year, from the 3 credit bureaus?

I didn't know.  I was about to pay when a friend told me about  No cc needed.

-Have you checked yours lately?

After getting the 3 reports, I discovered I had extra social security numbers, a husband without a last name that I have never even met, and so much more wrong information.

-How many credit cards do you have? Loans?

I didn't even remember I had co-signed for a car loan.  I had credit cards I didn't even remember I had opened but never closed.  By the way, information does not fall off your credit report after 7 years like I was told before, it is 10 years from the reported closed date/paid date/reported date.  I had a credit card that was paid off and closed when my house was being purchased that should have fell off already, so i thought.  No, the creditor did not report the card paid in full/closed until 2010 which is 4 years after it actually was.  Check your reports.  Close accounts that are not being used.  Pay off as many cards and loans as possible, so they can clear off sooner.  All of these items affect your credit score.

-Interest Rate?

We were offered a very low interest rate but it wasn't low enough to me, I wanted the lowest available.  Did you know you can "buy" or pay to get a lower interest rate?  Find out all your options before making a decision.  See if it is cost effective for you.

-Marriage laws?

I knew this one, but do you know if anything happens and you happen to get a divorce what happens to your assets at the time of dissolution of marriage?  In the state of TEXAS, you split everything 50/50.  I get half, he gets half.

-Loan selling?

In the middle of me trying to refinance my home, I found out that my home loan was sold.  Yes, sold to the highest bidder.  I was so scared but apparently this happens all the time.  Make sure you get all the information and keep records of all payments/transactions, etc...

In summary, this very scary situation had me on pins and needles.  It has been a month of paperwork, phone calls, emails, and head aches but in the end this is the best move for us to make.  Someone explained a home refinance as you purchasing your house from yourself.  You are the seller and you are the buyer.  All the steps that someone would take to sell and buy a home have to be done.  It is all procedures, and paperwork.  Ask questions, a lot of them.  Make sure you understand every step, ask for explanations.  It is not as scary as it seemed.  I am so glad my process is over.

As of today, Mr and Mrs Independentmami are now the proud owners of our old home!

Are you a home owner?  Have you refinanced your home?  I don't know abut you but this whole process made the hairs on my back stand up every time I got a call or email from the future lender.  How easy or hard was your process?

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