With a potential war with Iran emerging, refinancing now may be a smart move. Investors may flee to the safety of bonds and mortgage rates will subsequently decline once more. If you missed the large refinance window in 2H2019, it’s coming back again!

In this article, I’ll share with you all the mortgage refinance fees you actually don’t have to pay if you do a no-cost refinance. Let me explain each one in detail given I just finished refinancing my primary residence mortgage.

My new loan is a 7/1 ARM at 2.625%. The loan amount is $700,711 and the new monthly payment is $2,814.41. Not only did this mortgage refinance cost me nothing, I was paid a $220 credit.

The only downside to my mortgage refinance was that it took a little over four months to complete. It was a real PITA, but I’m happy to have got it done. Over the next seven years, my cash flow will increase by ~$91,000 and my interest expense will decline by ~$95,000 had I not refinanced.

After publishing, The Hardest Mortgage Refinance Ever, a reader asked me whether I’ve ever considered recasting a mortgage instead.

My quick answer was no, despite having refinanced multiple mortgages on multiple properties since 2005. I’m all about getting the lowest mortgage rate possible.

Recasting a mortgage can be a good idea if you come into a lump sum of cash and want to reduce your monthly mortgage payment while not having to go through the hassle of refinancing.

In this post, I’d like to explain what a mortgage recast is, its pros, and its cons. Just because I’ve only refinanced my mortgages doesn’t mean that we should ignore the benefits of recasting a mortgage instead. For those of you who’ve recast, feel free to pitch in as well.

Praise be to all that’s good in this world! After four months and one week, I finally was able to refinance my primary residence mortgage!

My original loan was a 5/1 ARM at 2.5% that began on August 1, 2014, and reset to 4.5% on August 1, 2019. The loan amount was $990,000 and the payment was $3,920 a month.

My new loan is a 7/1 ARM at 2.625%. The loan amount is $700,711, and the new monthly payment is $2,814.41. There was no cost to do this refinance. In fact, I was paid a $220 credit.

A $1,105.59 monthly cash flow improvement helps counteract new preschool and healthcare costs. But it’s not enough, which is why I need to find new ways to save and make money.

My ultimate plan is to pay off our primary residence by October 1, 2026, and never get another mortgage again. Mortgage rates would have to drop another 0.5% for me to even consider going through another refinance.

This refinance was my hardest mortgage refinance ever due to the time it took, the various curve balls faced, a self-inflicted wound, my general frustration with an unfamiliar lender, and a very snippy title officer.

But it’s over now and I wanted to share some takeaways to potentially help you make a better refinance decision.

My latest mortgage refinance based on relationship pricing was one of the most frustrating refinance experiences ever.

As part of the agreement to get the best mortgage rate possible at the time, I decided to transfer $1 million in assets to my new mortgage lender. The assets consisted of a ~$770,000 investment portfolio and ~$230,000 in cash. I thought it would be a straight forward process, but it wasn’t.

I was able to transfer successfully ~$900,000, one week after the paperwork was initiated. But the remaining ~$100,000 got stuck in limbo for another two weeks. Why? Because apparently, there is some rule that states that if a Treasury bond is maturing within 30 days, a bank may not transfer the asset until the bond has matured and fully settles.

I asked both banks why the Treasury bond couldn’t be first transferred and then left to mature at the new bank. The receiving bank blamed the sending bank for refusing to send the payment due to the rule. Then the sending bank blamed the receiving bank for refusing to send the payment due to the rule. In the end, all I could do was wait.

Not being aware of this transfer rule cost me time and money. When I hit this snafu, I was already three months into the mortgage refinance process. Worse, however, is that I had been advised quite confidently by the lender that this refinance would be completed in two months.

As a result, every day after two months was an unanticipated $35 in interest expense because my 5/1 ARM had already reset from 2.5% to 4.5%.

Let me tell you one of my favorite jokes.

Elizabeth, Donald, and Joe are stranded on a desert island. Their plane crash-landed and they miraculously survived.

After living off of only coconuts for two weeks, Donald looks into the distance and thinks he sees land. He’s not sure whether he’s delirious, but he convinces Elizabeth and Joe that there’s only one way to find out.

After swimming for more than eight hours, the gang of three happily realize Donald really did see land! They’re elated.

About 30 minutes away from shore Joe suddenly stops and says, “Folks, I’m too tired to continue. Go ahead without me.”

Joe then decides to turn around and swim all the way back to the island.

During my mortgage refinance, I pulled a Joe. Let me explain why.

On March 11, 2019, Federal Reserve Chair Jerome Powell indicated there will be no further rate hikes in 2019, even though he suggested that two were likely this year as recently as December 2018. Then in August 2019, the Fed finally cut rates for the first time in 10 years.

A rate cut is welcome news for borrowers and investors. However, declining fixed income yields is also a sign of slowing growth. The Federal Reserve does not see the economy as strong enough to withstand higher interest rates.

It’s hard to accurately predict the future. The bond market is telling us one thing and the stock market is telling us another.

But when you’ve got a bird in the hand, don’t let go. Every homeowner should at the very least refinance their mortgage now and boost cash flow.