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?
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.