Freed by 50

Oh the joys of owning a home!

In my 40.5 check in post I mentioned how our pool liner had failed and needed to be replaced.  This was an expected, but still surprising $4200 setback that wiped out my “Oh shit the ____ is broken” fund.   I’m sitting on my deck watching the pool fill up with the new liner installed and I’m happy we did it, just annoyed at the cost.

While all of my attention was focused on the liner, one day my wife walked through our dining room and asked “Why is there a brown spot on the ceiling?”  I climbed up on a chair and poked it.  My finger went right through the ceiling.  Thankfully, she had discovered a leaking second floor toilet shortly after it had started leaking.  I cut away the wet sheetrock and discovered…..it was the connection to the waste pipe that was leaking…and I was covered in it.  After a long shower, I attempted to fix it myself, but quickly discovered it had been rigged up by the installer and I was out of my depth.   Thankfully this turned out to be a $100 fix, paid out of the “true emergency fund.”

Last week, and opportunity arose.  I had learned a hard lesson trying to stretch the life of my old pool liner as far as it would go.  I was doing the same thing with our driveway.  Although its just a driveway, and despite its poor condition it always seemed to stay under my cars when I parked them in it, it was quickly deteriorating.  I was spending more and more time weed whacking the grass chunks out of it, and watching it quickly turn from asphalt to gravel.  I happened to be outside when a driveway guy was trolling our neighborhood.  After negotiations, he agreed to do the driveway for $3k.  This was less than half what I’d been quoted before, and he could do it the next day.    I like working with reputable people, and he turned out to be honest and hard working.  I wasn’t planning on this expense, so I dipped in to the big emergency fund for this.  It cost me half a month’s expenses, so that’s another fund I have to refill in August.

Those three setbacks are a total of $7300 in the month of June.  It seems I’m just always doomed to have expensive Spring’s.

Back in March I wrote about how my basement project had cost me four years, in that if I’d just sent the money to my mortgage company I would have wiped four years off of my loan.  While I love my new basement office, the playroom for the kids, and the added space, the thought of missing out on that four year time savings has been nagging at me.

While logging in to my credit union yesterday, I noticed their current 20 year mortgage rates happen to be 3.25%.  That’s more than a full percentage point less than my current loan.  I spoke to the bank and I’ll easily qualify.  With 24 years remaining on my mortgage, I could refinance and wipe out four years of payments.  Because of the interest savings, my payment would only increase $60/month!  The downside is that this would cost $9600 in closing costs and probably require a $450 appraisal.   Many people simply roll those costs into the mortgage, but most of those costs are taxes, and the thought of paying interest on taxes for 20 years is sickening to me.  Plus, doing that changes my loan to 3.57 APR.  I happen to like 3.25%.  That’s only .25% above inflation.

Although I haven’t signed anything, and I’m still shopping around, this refi is happening.  The opportunity to shave those four years off of the loan for a comparatively minimal cost and a ~$92k savings in principal and interest payments over the life of the loan is huge.  My one heisitation is the news that the Fed may actually lower interest rates in the next month or two.  Could this deal get better?