A truly wise person learns from other people’s mistakes, so I’m going to share another of my mistakes so that you don’t have to experience it yourself.My wife and I bought a new home in 2002 with a 6.75% 30 year mortgage. That was a good rate at that time and we never had trouble affording the payments. We love our home, but I never loved having a mortgage! Over the next couple of years I made some additional payments toward the principle to try to get rid of the mortgage quicker but I completely ignored interest rates. That was a pretty big mistake because I missed not one but two great opportunities! In 2003 and again in 2004 I could have refinanced to a 15 year loan in the mid 4% range. My monthly payments would have been about the same, but refinancing would have helped me in two ways:
- I could have saved over $10,000 in interest.
- I could have been mortgage free 4 years earlier!
I did eventually correct my mistake and refinance down to a 5% 15 year loan in 2007. Today rates are really low again- according to Bankrate.com a 15 year fixed mortgage is at 4.56%! If you have a mortgage at a higher rate shouldn’t see if refinancing could save you thousands? Don’t make the same mistake I did and ignore the opportunity from low rates!