Remember that awesome refinancing idea I had back in January? (Well, awesome to me but dumb to a portion of you? ;)) Whelp, I’ve finally decided to shoot it down myself for the time being. Oddly enough it was a lot harder to fine someone to loan us $65,000 than I initially thought ;) Haha… But I still very much love the idea!
(For those who missed it – my plan was to take out a loan from a friend/biz person and pay THEM the 5% interest on it instead of my mortgage company, so that way we can refinance and lock in a lower rate going forward (which we can’t do at the moment cuz we’re too underwater). Some people thought it was playing with fire because it’s basically shuffling money from one place to another, but I thought – and still think – it’s brilliant if it can be pulled off. I’d MUCH rather pay interest to a friend or biz partner than I would the bank! It’s a total win-win in my eyes.)
Life changes, though, and the following variables have crept up in the meanwhile:
- We just offloaded over $25,000 into my SEP Ira – so the idea of giving up even more to accomplish a mission isn’t as exciting anymore. Even though technically – yes – we would still be okay with another $30,000 missing. Which is now the remaining amount of our 2nd mortgage – we paid off $4,000 since first blogging about this! I freakin’ love using time to our advantage.
- We plan on moving over the Summer, and probably not best to do anything drastic until we’re nice and settled in. Still considering North Carolina btw, though we’re now considering more closer locales as well so baby and grandparents can still hang out :)
- I wasn’t convinced 100% that we would save *enough* in the end to make this refi plan worth it. We’d have to get our interest rate at least lowered down to the 3%-3.5% range to save the desired amount ($300-$400/mo) and from talking with all kinds of bankers and helpers I had advising me, the more conservative estimate was hovering around the 4% mark. Still MUCH better than the 5.5% we have now, but not a total game changer… Although it is recurring which is nice :(
- And again, no one took me up on the loan offer. I’m *pretty* sure I could get my parents to sign off on it, but really who wants to do that? I’d only feel comfortable if it were more of an emergency than a nicety, as much as a nice loan could help us!
So lots of changes, but ultimately I’m okay with it as it stands. Which is paused :) Now I’m just telling myself it’ll all be paid off within 8 years anyways, so in the grand scheme of things it’s not that much of a loss! Even IF this plan would lower the pay off down to 6 or 7 years instead of 8, boooooooo……
Definitely a fun concept to mull over though… Anytime you can think outside of the box to better your financial situation, I highly encourage it. Even if people say it can’t be done or that it *shouldn’t* be done. Most brilliant ideas are tossed aside by the masses in the beginning anyways :) And the more you do it, the more you’ll come across something that does stick eventually! So it certainly makes life interesting. And you learn a butt ton in the process as well – similar to starting a company and it failing. You get just as much knowledge out of those than you do successful ones!
Anyone contemplating some of their own good ideas right now? Or any you want to throw our way for some advice and commentary? Drop ’em below and we’ll give you our honest opinions! It’ll help everyone out :)
[Photo by: Tsahi Levent-Levi // tweaked by J$]