I have had my first house for almost 3 years now. I have refinanced once already and I am about to refinance again. For this one I needed to get a new appraisal, which was expected. The only catch here is that the appraisal came in about 20% lower than my original purchase value.
This new value is rather close to what I owe on the house currently. I am able to knock my principal back down to 80%, but it feels like a losing battle. It's about half of my 1 year back up stash. Is there anything wrong with doing this? It seems like I will never have any equity at this rate...
I am refinancing from a 4.2%, 20 year loan to a 2.75%, 15 year loan.
Edits: The first refinance paid its self off after about 18 months and I have had it almost 2 years. This current one is a little trickier to figure out, but the closing cost would be covered in less than 20 months. I do intend to stay in the house as long as possible barring some special circumstance. 15 years is doubtful, but it is very possible I could be there for around 10. Considered trying to pay it off sooner, but very little reason to do so at that interest rate.
I guess owning my first house for almost 3 years and having to refinance twice and seeing the value drop like it has it a little jarring.
Details... Currently at 83k @ 4.2% for 20 years (~18 left), going to 72.4k @ 2.75% for 15 years. Monthly is going to drop from $542 to $490. Refinance cost is $800 + $300 for the appraisal (which should more than pay itself off from my tax protest this year).