It seems as though my husband and I won’t be refinancing after all. I considered shrinking our mortgage from 15 to 10 years, but decided that the cash flow issues were not worth the additional interest savings.
At the end of the day I simply couldn’t convince myself to take on more monthly payments when I’m really not sure how long I want to remain out of the workforce. I ran the numbers on a 15 year mortgage and found that we’d save $10,000 or so after closing costs. We have approximately 13 years remaining on our current mortgage and the idea of extending our debt payments was not appealing, although the idea of freeing up cash flow forced me to consider the option a couple of times.
Refinancing can be a real pain in the you-know-what, so I really didn’t want to go through the hassle and paperwork unless it would save us a significant amount of money. Add to that the fact that I will be losing my job in a matter of weeks and the window to refinance while I can still produce a bi-weekly paycheck is quickly diminishing.
Simply put we decided not to refinance the mortgage. Instead I am going to call our lender to find out if we can switch to a bi-weekly payment schedule which will trim the overall timeline to being debt free! I’ve also decided to add additional principal to each payment if and when it’s possible. Little by little I hope to chip away at at the debt and trim our overall payments by three years. The move to bi-weekly payments is a good step in this direction. The additional principal should definitely help us meet our goal.
We won’t save as much interest as we would have by moving to a 10 year mortgage, but given my current circumstances and the fact that I have no idea when I’ll want to return to the working world I think it’s the best decision we can make for now!