First person: Because I refinanced, I can quit my job in my 40s

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First person: Because I refinanced, I can quit my job in my 40s

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Laura Quinn standing in front of her Florida home, which she refinanced at 2.75 percent.

Thanks to refinancing, I can announce "I quit" if I feel like it in my 40s. With the middle-aged work burnout I'm experiencing, a tremendous burden has been lifted knowing that I can easily weather a layoff or walk away from my full-time job if I choose to.

When we originally purchased our home in 2006 for $183,000, we took out a 30-year mortgage. A few years ago, our bank offered to refinance our loan at no cost to us. Our interest rate went from 7 percent to 4.6 percent with a 15-year mortgage. We recently refinanced again, taking out a 15-year loan for the second time. Our new interest rate? A sweet 2.75 percent.

Having options we never had

We now have the option to pay off our home earlier than we could have as well as the option to live on one income. Our old mortgage payment was about $1,200. Our new payment is only $900 a month. If we apply an extra $600 a month to our mortgage, we can be completely debt free in another seven years while I'm still in my 40s.

Being free of layoff fears

Working in the media industry, I was under a lot of pressure during the Great Recession as many of my colleagues faced layoffs and unemployment. Now that we have such a low mortgage payment, I don't worry as much about potential job layoffs. I know we can afford to make our payments on one income. If I were laid off, I'd probably "retire" in my 40s.

Making home improvement plans

If I continue to work part time, I'll be able to use that money to make home improvements since we won't have the burden of a mortgage. Once our home is paid off, we will just have to take care of our yearly homeowners association fees, homeowners insurance, and property taxes. Knowing we can be mortgage free in another seven years motivates me to put off spending money on new furniture and countertops. I can wait until we no longer have a mortgage bill every month.

Buying a car with interest savings

Our new loan balance after refinancing is $103,550, which includes the closing costs that were rolled into the loan. Over the course of our 15-year loan, we would pay $22,962 in interest. However, with our plan to pay off our home in seven years, we will end up paying only $10,401 in interest. If we had not refinanced to the second 15-year loan, we were looking at another 14 years left and $37,500 more to pay in terms of interest. I figure the amount of interest we are saving is enough to purchase a new car. It could also pay for a new sunroom.

Refinancing our home at 2.75 percent was an easy decision. I knew rates would not go any lower. Now, I can see light at the end of the tunnel as I get closer to a zero balance on my mortgage statement every month.

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