HomePersonal FinanceIt Feels Like I Will Never Be Able to Refinance

It Feels Like I Will Never Be Able to Refinance

I documented the process I went through when selling my first home and buying our current home, but I didn’t really think about one aspect of the transaction until recently.  Some background first, I bought my house in January of 2013 for $485,000 with 20% down and a 3.375% 30 year fixed.  I am well aware that with regards to the interest rate I hit a home run.  You may have to zoom in but whether we are looking at recent history (past 5 years) or long term (past 35 years) I bought at a damn good time with regards to the mortgage interest.  So what am I bitching about?

30 year Fixed Mortgage Graph 5 Years

30 year Fixed Mortgage Graph Since 70

I’ll Never Be Able to Further Leverage the Home by a Cash Out Refinance

There are probably a lot of people thinking that one shouldn’t leverage their main residence, and they are probably right, but not having the option feels constraining.  Sure, I’d be able to get a HELOC but there are restrictions as to terms and amounts  So whether it is for a large purchase, investment or to lower my payments it feels like I’ll never be able to refinance my home since doing so is likely to be a terrible financial decision.  How could I justify starting my payments over at a 4%, 5%, or gasp, 7% rate?

I am certainly not looking for sympathy, because there is no way I would have it for someone complaining about low fixed debt! Just rather an aspect of home ownership I never really considered until recently.



    • The HELOC would allow me to access to the cash (i.e. future leverage) but I wouldn’t be able to ever low my payments with a dump in/over payment.


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