If you’re like most people, you probably meet with your financial advisor at least once a year to review how changes in your life and in the securities markets could impact your invested assets. However, few people think to request a similar check-in with their loan officer to conduct a review of their mortgage. Yet, periodically ensuring your current loan terms remain in your best interest is an equally smart money management move.
Your Biggest Asset Is Usually Your Largest Expense
With the recent recovery in home values in our area, it’s likely that your home equity has also increased. That rise may enable you to strengthen your overall financial situation or help you realize other financial goals.
For instance, if you bought your home several years ago and took advantage of one of the low-down-payment programs, your home equity may be high enough now that you are no longer required to pay Private Mortgage Insurance (PMI) each month. Being able to eliminate that expense either by having your home re-appraised or through a refinancing can reduce payments by $100 a month or more.
Similarly, if your family is expanding and you are thinking of adding on to your house, buying a vacation property, or your children are fast-approaching college age and you are looking for money to help pay for college, it could be more affordable to access your home equity through a second mortgage or by refinancing than through other financing arrangements.
5 Potential Benefits of Refinancing
- Eliminate mortgage insurance
- Pay off faster
- Lower monthly payment
- Cash out
- Potentially reduce taxes
Where You Started Versus Where You Are Today
It’s natural that after making a big decision, especially one involving a lot of paperwork, like a mortgage, to resume your regularly scheduled life and not give it another thought. However, given the amount of money you have invested in your home and the size of your monthly mortgage payment, proactively managing your home loan through periodic reviews has the potential to help you meet more of your financial goals even sooner.
When to Review Your Mortgage
- Interest rate environment changes
- Life changes (marital status, new baby, college-bound child, retirement)
- Remodeling or have plans to
- Home equity rises above 20%
To schedule your annual mortgage review, contact your loan officer here or call 1-877-966-0202.