Tuesday, October 27, 2009

One smaller mortgage payment, please

My last post gave you all the hairy details of our house aquisition last June.  This one is all about the way we worked the system like the Gosselins got a great deal on a refinance this year. 

Last year we refinished the living room/entry floor, removed miles of wallpaper, painted, painted some more, cleaned up the yard and added paneling to the dining room.  Even with all that, the place was looking pretty rough in January, and this was for a reason.  We wanted to get a city assessor in here to lower our assessment, and the soonest this could be done was the first of the year.  So...we left things looking like this to plead our case that the house was not 'worth' what we were paying taxes on:
 

Do you like how I hung a picture up to distract from the wallpaper that is still on the upper walls in the stairway?

Before this, I actually used to have a bunch of pages from the Victoria's Secret catalog taped on this wall because I thought seeing Adriana Lima in lacy panties would distract Shaun from my 'wallpaper picking'.  He thought it was stupid to pick off little pieces of wallpaper here and there because it made the house look worse, he wanted to wait until we were ready to do the entire project.  You can sort of see my handiwork in this picture:
         
My 'lingerie artwork' was up for a housewarming party we had, everyone thought it was hilarious.  Anyway, our plan to keep the house looking dumpy for the assessor worked, he lowered our assessment by 26k in April!  That would translate to a $566 annual savings if property tax rates remain the same this year, which I know isn't happening.  We will see what we've saved soon.   

After the city assessor left in January, we knew we were going to try to refinance because rates had dropped so much.  This meant we had three months to un-dumpify the house substantially to raise our value enough to avoid the dreaded PMI.  Our plan was:

Finish removing wallpaper in entry, stairs and upper hallway areas.
Prime, paint these areas including trim. 
Refinish stairs.
Change out light fixtures in entry, upstairs bath, downstairs bath.
Completely redo downstairs bath.
Stage the upstairs hall.
Stage the
master bedroom and guest bedroom.
Stage the living room, dining room and two attached sunporches.
Pray that our city assessment didn't get lowered until after the refinance!

Happily, everything worked out and the credit union we worked with received the inspection report stating that the house was worth 20k more than our new 'lowered' city assessment, and 35k more than we purchased the house for last June!  Pretty sweet in the bad housing market, if I do say so myself.  We now pay $200 less per month after securing a 4.875 interest rate and eliminating the PMI we had been paying.  Plus, our property taxes will go down because we were proactive in getting our assessment lowered while we still had a chance.  Since we escrow, this means that hopefully next year our total payment will be even lower.  And our closing costs were only $1200 so we have already recouped those costs from our lower payments.  Woot! 

In closing, please check out this hilarious photo I took when we first saw the house.  This is the upstairs linen closet containing a bottle of olive oil, and a can of WD-40 for all your bathroom oiling needs:
                       
Other weird stuff the previous owners left here: a single (dirty) men's suit hanging in the master bedroom closet and a clean but taped-shut-like-it's-dirty diaper in the guest room closet. Wha??

7 comments:

E @ Oh! Apostrophe said...

Way to work the system! We did some similar finagling to try to get the appraisal up in some cases and down in others. Such a pain!

PS. Do I dare ask how you found out that the taped-shut-like-it's-dirty diaper was in fact clean? Ew!

Sara @ Russet Street Reno said...

You know, I just assumed that it was clean because it didn't stink after sitting there for months! But who knows. Either way, I washed up good after tossing it out...gross.

Sharon said...

You should put the improvements ... panelling, etc up with velcro ... then you can take it down when you need to for the 'low' look and replace for the 'high' look!!!
Congrats on the assessment and refinancing.

micah @ the yellow front door said...

Love your VS artwork!

Olive oil and WD-40... awesome and slightly disturbing.

kelly@TearingUpHouses said...

can i ask where you got that animal print rug and if you're happy with it? we're looking for something sort of similar...

kelly

Amanda said...

Just looking at some of your older posts. Nice work on lowering your mortgage! I can't wait until we've paid enough on our house to get rid of our PMI. If we ever get around to finishing our basement, that will certainly help!

Miss Chelsea said...

Hmm... interesting! Very smart!!