We went under contract on our first home purchase the same day Bernanke decided to announce the feds plan to slow down their quantitative easing policy. It was quite frustrating.
Had we found this same house just 30 days earlier we would have been looking at an interest rate on our loan of about 3.7%. Rates rose like crazy after Bernanke spoke. 4.125%. Then 4.375%. Then 4.5%. Then 4.75%. They rose a full percent in about a week.
While one percent may not seem like a huge deal, it has a giant impact on our monthly payments. The difference between 3.7% and 4.5% is about $133 per month. Stretch this out over a 30 year loan, and we would be paying $47,880 more. This is especially frustrating because this $47,880 doesn’t go towards our principal balance, it goes straight in to our lender’s pockets.
After watching rates steadily climb day after day, we pulled the trigger and locked at 4.5%. I felt defeated. Had I known rates were going to spike right at the time we went under contract, we may have never put an offer in. Fortunately, I’ve known our loan officer for about 10 years and he is looking out for us. We were talking on the phone every day, mulling over our options. I got an email about a week after we locked, saying our lender was able to renegotiate our rate to 4.125% at no cost to us.
While I wish our rate was 3.35% like some got six months ago, I just need to remind myself that the house is more important than the rate. I’d rather own a home at 4.125% that I love, over a house I don’t love at 3.5%.
Moral of the story: I’ve once again proved the point I have really, really, really bad timing with things that are out of my control.
All I can do is laugh, it’s the only thing keeping me sane.