Today Rob and I checked out SmartHippo.com again and decided how to approach our refinancing project. We had our first mortgage, as well as a home equity loan of $15,000. Our first mortgage was at something like 5.5% and the HELOC at 8%. We were able to refinance both into 4.5% with our regular bank, paying one point into a 15 year loan and keep our payment very close to our existing fixed 30 year loan. We’re also going to enroll in the mortgage accelerator to pay it off faster. This is exciting! We’ll be making real headway with every payment towards being debt-free. We spoke to a number of banks today about the subject and all were shocked that we were OK with a higher payment, and that we wanted a 15 year fixed, instead of rolling our 30 year loan (now in year 5) into another 30–and extending our term by another 5 idiotic years. (Dave Ramsey calls this the “stupid tax,” meaning the premium one pays for making dumb financial choices).

Our house won’t be underwater, and we’ll still have plenty of equity. Also, we’ll be building equity like crazy, with more than half of our monthly payment landing in equity–not interest.

One surprise in this process was that so many of the companies we talked to wouldn’t recommend their mortgage accelerator program–because it was administered by another company and you had to pay a fee to enroll, essentialy the other company works like a payday lender and loans the mortgage the difference between the two payments. We searched out the right accelerator program with the same zeal that we searched out interest rates.

Another interesting surprise was that because of our recent debt-busting efforts (two credit cards and two vehicles and an adoption loan paid off) we were able to qualify for our refinance based ONLY on my husabnd’s income. This we’re told was because of our excellent credit scores and our low debt-to-income ratio. The mortgage consultant said adding the verification process of my self-employment income wouldn’t get us a lower rate as we already qualified for the lowest available rate. Saves us a lot of headache, and provides a lot of peace of mind.