For many Americans, our homes are not just the places where we eat, sleep and live our lives. They’re also our single greatest asset — as well as our greatest expense. In order to protect that asset, it’s worth taking some time out each year to review what has happened in our lives (and in the real estate market) over the previous 12 months, and ensure our homes still have the right financing behind them.
It’s a smart financial move to ensure that your current financing is still complimenting your current and future financial goals. Reviewing your loan with a licensed mortgage professional will let you know if your current interest rate can be lowered to save you money. We’ll determine what mortgage interest rate will necessitate restructuring your loan, and set up a reminder to let you know when that rate is reached. At the same time, we can also check the current market value of your property and review your credit history to make sure there are no errors.
I always look forward to the opportunity to touch base with my valued clients during our annual no-cost, no-obligation mortgage review. Below are some of the points we will address that may have changed in your life during the last 12 months.
Low mortgage rates. We keep hearing that mortgage rates are lower than they have been in decades. Perhaps you were not in a position to take advantage of today’s rates with a loan refinance. If circumstances have changed, a refi may be just the ticket to lower your monthly payments.
Life changes. A new baby, an unexpected medical expense, saving for college tuition, decreased or increased income, buying a new vehicle and taking on a monthly car payment — these are all big events that can change your budget significantly. Some of these events you can plan for now, so that you are prepared. For unexpected expenses that may have occurred in the last year, we can discuss a cash-out refinance to meet additional financial burdens head-on.
More favorable loan options. You might want to consider different loan terms, get a completely different type of mortgage, or remove a second mortgage. Or you might be in an adjustable-rate mortgage that will soon adjust upwards, so you might seek a fixed rate.
Eliminating mortgage insurance. Perhaps your current loan includes private mortgage insurance (PMI), which is required when you make a down payment of less than 20 percent, and can cost from .25 to .75 percent of the home’s value. If you financed your home at least two years ago and now have 20 percent equity in your home, you can request to remove the PMI. You may also consider a refinance for a different type of mortgage.
No matter how you slice it, engaging in an annual mortgage review is a big job, and you’ll need some expert advice to ensure your mortgage is still the right one for you — or to select new financing that brings you greater benefits. I look forward to sitting down with you and reviewing all the options available to you make your mortgage work for you!