Why I refinanced my mortgage during the coronavirus pandemic - Business Insider

The world changed rapidly in March. While it feels like an eternity, just eight weeks ago most of the United States was only just realizing the seriousness of COVID-19. As financial markets began to seesaw, the, so did mortgage rates. My loan was just three years old, but still I decided the time was right to refinance. When I did, I lowered the term of my 30-year loan by five years, which effectively cut two years off of the life of my mortgage.

With just a year of full-time income under my belt, my wife and I had to scramble to find a bigger down payment if we wanted to buy the home we had in mind. Based on one part-time year and one full-time year of self-employment, the maximum loan we qualified for left us a little short. We made that monthly payment as planned for nearly three years before rates dropped in March. Rates fell enough that we decided to lock in a lower rate. With four years of self-employment,Easy approval also gave us some options as to how we wanted our new loan to come together. We didn't need or want aChoosing between a lower payment and a shorter loan duration

The math came out to a monthly payment of about $150 lower per month with a 30-year loan or $50 lower per month with a 25-year loan. The lower payment and lower term seemed like a win-win. We would trim two years off of our loan and cut our payment at the same time.and ended up getting about $700 back when our loan settled. Our loan balance did go up, but only by a small amount compared to the loan balance and lifetime interest.

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