Four Benefits of Conducting an Annual Mortgage Review
Did the Fed’s July rate cut get you thinking about your mortgage and whether it still meets your needs? After you settle on the purchase of your home, it’s easy to check off “obtain mortgage” from your to-do list, set up automatic payments and forget about it. But that might be a mistake. Chances are your finances and other factors that influenced you to choose that loan product will change after settlement. That’s why it’s important to conduct a mortgage review each year to make sure the loan you have is still the best choice.
During the review, your lender will look at your loan balance, monthly payment, interest rate, taxes and loan term. They may identify opportunities to help you save money or take advantage of the equity in your home, including:
- Shorten the term. The most common mortgage carries a 30 Year Fixed term, which you may have used to purchase your home. Now that time has passed, you may be able to handle a shorter term, which will save you money in interest charges over the life of the loan.
- Get a lower interest rate. If interest rates have dropped since you bought your home, you might be able to refinance your loan at a lower rate. Some lenders charge fees to refinance, but we will happily review your current mortgage for free, and from there we can evaluate if a no-cost refinance is available for you.
- Eliminate private mortgage insurance. If you’re paying PMI and the value of your home has appreciated enough that your LTV is less than 80%, you can stop paying PMI.
- Get cash out. You may be able to refinance and use the equity in your home to pay for other expenses such as home renovations, medical bills or college tuition.
If you’re wondering whether the mortgage you have is still the best option or if there are better alternatives available, give us a call today to schedule your mortgage review.