Refinancing My Home Mortgage Saved Me $285K!

January 10, 2022

Written by 

Sarah Richardson

Many people fall victim to not knowing you can refinance your home mortgage after buying a home. When choosing a lending company, it is ideal to find a company that is reputable, reliable, and truly has your best interest at heart. I am so thankful for Freedom Mortgage’s Federal Housing Administration (FHA) Program.

If you read about how I purchased my first home, you know one of the main perks of an FHA loan is the low rate of a 3.5% down payment for a home purchase. Most first time home buyers may not have ample liquid cash to provide up front, so this is a great program to provide equitable access for first time property owners to get their foot in the market.

The Refinancing Process

A Freedom Mortgage customer service representative first reached out to me about refinancing my home mortgage about 7 months after my initial closing. Mortgage rates were dropping considerably around October 2019, and I was eligible to reduce mine. I know what you might be thinking, what’s the catch? I was being offered a lower interest rate, lower monthly payment, and no cash to close on the new loan! How could this be possible? (PS. If you’re looking to shop rates, I always use this reliable source!)

Freedom Mortgage was able to do this for eligible FHA Buyers by wrapping the final closing costs into the new loan. When closing on a new loan, there will always be cash needed to close for lawyers and paperwork fees. They would then provide a new loan at a lower interest rate, which across 30 years would save me thousands of dollars. I immediately searched amortization tables (you can find one here!) to see how much money my current loan was costing across 30 years compared to if I refinanced under Freedom Mortgage’s recommendation. The results were shocking! With every 6 months of payments paid on time, Freedom Mortgage was able to *continuously* provide this service to its eligible customers.

After extensive research, I decided that refinancing would be the best choice to make for my financial plan. Since making this change, I have now been able to refinance for a lower rate 3 TIMES! Note: You can refinance as many times as you want. The main considerations are balancing the total amount of money owned across 30 years versus what you can afford for a monthly mortgage note. You won’t believe the numbers below.

FHA Versus Conventional

Now, keep in mind that I will eventually want to switch to a conventional loan since the private mortgage insurance (PMI) remains on an FHA loan for the entirety of the loan versus PMI dropping off after 20% equity in the home. I will be looking into switching this February/ March depending on rates since we still have $215 of our mortgage going to PMI each month. That means we may have started at $2200/month for this home, but it will eventually be down to below $1500/month!

Amortization Table To Compare My Loans Across 30 years

Loan Amount$310,276.00$309,627.00$308,750.00$306,845.00
Annual Interest Rate4.50%3.50%2.75%2.25%
Term of Loan in Years3029.2528.6666666730
First Payment Date5/1/20191/1/202010/1/20208/1/2021
Payment FrequencyMonthlyMonthlyMonthlyMonthly
Compound PeriodMonthlyMonthlyMonthlyMonthly
Payment TypeEnd of PeriodEnd of PeriodEnd of PeriodEnd of Period
Rate (per period)0.375%0.292%0.229%0.188%
Monthly Mortgage$2,185$2,025$1,915$1696
Total Payments    565,965.61  495,112.16    446,611.42  422,245.34
Total Interest    255,689.61  185,485.16    137,861.42  115,400.34
    821,655.22  680,597.32    584,472.84  537,645.68

  Total Savings: 284,009.54

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  1. Emily says:

    So impressive you saved that much money!

  2. Kelly says:

    saving this for the future, for sure!

  3. Anonymous says:


  4. pearce says:

    It blows my mind to see so many people around with their old rates. Good to get this info out about refi for a lower rate

I'm so glad you're here. I'm Sarah, a retired NCAA Division I volleyball player who bought my first house after college and fell in love with all things home improvement. From design, DIY, and thrifting, you can find it all here. I hope you will be inspired and encouraged to make your house a home.

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