I received an email from our loan officer that assisted us in our house purchase that we closed on in Aug on this year. She states we will qualify for a lower interest rate (3.75%) based on our previous financials and due to a change in rates. We are currently at 4.25%. She indicated that based on the numbers, it would lower our monthly payments by $ 50-60ish.
They will have to pull our credit again, but she says it’s just a formality unless something major shows up (nothing will, but it is Christmas and this month’s credit card balances are a bit higher than usual; they will be paid off next month. Our credit scores are same as previous loan lock, if slightly better on husband’s side.) We would not have to resubmit any LOE or bank statements and the lender will pay all closing costs.
Thing is, we were planning on doing this in a couple of years anyway, to do a cash out refinance in order to do some renovations on the house. It’s currently a 3/1 and we want to add a bathroom and a new roof as well as lower the interest rate. We’re in a hot area, houses generally stay on market <10 days and we bought the cheapest house at under the appraised value and have already done improvements, upgraded and fixed some deferred maintenance items as the house had been a rental for the past 10 years. We don’t expect to do the cash out NOW, this would just do the initial refi to lock in a lower rate.
We’ve been doing some gardening on my husband’s credit, as it’s his credit that is the lower qualifier. Also we are hoping to get my husband a new car this coming year. His is 12 years old and showing every minute.
Another factor in play is that while my base salary is the same, and I am in the same position, I just made a change that will decrease my incoming net pay due to loss of weekend differential (I’m an RN). It doesn’t change the qualifiers, as they go off base pay, but I was already looking at a loss of $ 240 a month in our finances, and was going to make it up by picking up an extra shift once a month. This would help ease that loss slightly.
In typical “time is of the essence” speak, she’s asking us to make a decision soon. What is the experts opinions? Is this a good idea?