Sure, if we waited a day we could have got .0125% less or something.

Eh.

You have to understand, we were waiting for a rate of 5% for about a year. & we beat our target. Of course we jumped!

So no regrets here. Actually, still super excited!

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Along the same lines, yes we have started over our mortgage like FIVE times. Yes. But our very first interest rate was 8.25%. So we went from 8, to 7, 6, and now below 5%. We've lowered our interest rate by 3.4%!!!!!

The ironic thing is if we keep paying our last mortgage amount ($1300/month) we will pay off the mortgage in 2030. Which is precisely 31 years from when we bought our very first home anyway. So what, we take one more year and we pay almost half the interest?

Anyway, home loan amortizations can be very complicated. I have analyzed it every which way.

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We have never paid points on a mortgage, or financed closing costs. We've never added to our loan in any refi. It's been almost 6 years since we last refied.

This one is different. This will be our last refi. EVER! (I know, totally what we said last time!) But I really think so this time.

We are going to finance the $3k points & $2k closing costs. We will pay $1300 cash towards interest and the appraisal (I draw the line at financing the financing). But that would have been our mortgage payment for the month. So we will only increase our loan by $5k.

If we did this every time we refinances, might not be the greatest deal, but I regret not paying points last time (rates were similar) and just being done with it all. Kind of an expensive lesson.

Though having waited, we will get a rate lower than 5%. So maybe it is for the best this way.

So I am comfortable with adding to the loan, because I believe this is the one and only time. & We just don't have the liquidity we used to, to pay cash for the closing costs...

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BTW, if rates dropped any lower than this, we would refi to a 15-year-loan. Probably. I think I can pretty confidently say we will never refi 30 years again.

But never say never, huh?

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As an intro to this section, we live in the state of California. We will be itemizing our deductions for a LONG time. We could itemize without the mortgage! Biggest itemized item? STATE taxes. Very high.

Anyway, so, considering the tax savings, the effective rate on our mortgage is going from 4.6% to 3.9%. If my spouse worked and our tax rate went up, the effective interest rate would be closer to 3% (because we would save more taxes - saving in higher tax rates).

Anyway, my savings accounts are paying more than that, even in this economy.

So, yeah, I am going to be much more open to leveraging that debt, with this new low interest rate.

I will definitely be changing my priorities a bit.

Also, fixed mortgages get "cheaper" with time (inflation). We have not experienced that so much because I make as much money today as we did combined when we got our first mortgage in 1999. & our expenses have way skyrocketed (health insurance primarily). So, we haven't necessarily experienced that in the last decade, but with lower interest rates, our mortgage payment has literally gone down - by $400/month - over the years.

Because I expect my income to go up from here, and our mortgage to shrink in terms of inflation, going forward, I am not big for any pre-payments right now. Another reason we are shifting our priorities a bit.

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So all that being said, I will not be very gung ho on the mortgage, certainly not the next 3 years. If ever. But I still want to have it paid at 45. I am thinking we will focus more on investing though, and trying to beat that 3% - 4% return. We may shift our goal to have the investments to pay it off by age 45. I don't know. This REALLY changes things.

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I think this refi will allow us to max out one ROTH next year. We have not put in upwards of $2k - $3k of our income into an IRA since before kids. (We have from savings or gifts; not from income). So this is a pretty big goal for us, and one I am excited to meet with this refi.

We really need some more liquidity, and it is kind of a conundrum. Look at those low stock prices!! But with the economy - I wish we had more liquidity!!

I *think* we will focus on the ROTH and snatching up cheap stocks this year.

I know we will have another $3k easy in 2010, from income, once LM is done with preschool. So I think we feel comfortable sticking with about $5k in cash/taxable savings next year, and aiming for more like $8k the following year, when LM is done with school. I think we can put it off for 18 months or so, and be okay. We do have an emergency fund in the interim, and all that.

So kind of what we are thinking. We'll see!

Excited to snatch up more stocks. Will put our retirement contribution closer to 17% (of gross income) - and - what a year to make a leap in contributions! With stocks so in the toilet. Buying cheap!

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Besides all that, work is CRAZY!!!!!!

More on that later I guess...