Mortgage Checkup
Consider all the changes in your life since you first took out that mortgage—whether it’s been five, ten, or even twenty years. The reality is that a mortgage doesn’t get better with time; in fact, it can become outdated if not regularly reviewed. It no longer reflects current market interest rates, may not align with your evolving financial situation, and doesn’t account for your future goals. That’s why it’s essential to review your mortgage regularly—ideally once a year—to ensure it still fits your family’s needs and long-term objectives. A mortgage checkup is quick, easy, and highly recommended like an annual physical. What is a Mortgage Checkup? A mortgage checkup is a comprehensive review of your current mortgage and overall financial situation. The goal is to ensure that your mortgage is optimized for tax benefits, cash flow, and your long-term financial goals. Over time, as market conditions, income, and household needs evolve, your mortgage may need adjustments to keep it aligned with your life. An experienced loan advisor can assess your unique circumstances—whether you’re planning for a major life event or simply looking to improve your financial standing—and offer tailored recommendations to help you save more, pay off debt faster, or even determine if you’re in a position to purchase a new home. Preparing for Your Checkup For Mortgage Checkup Getting a mortgage checkup is simple and won’t impact your credit unless the discussion leads to a prequalification or mortgage application. There’s no need to worry about a credit inquiry affecting your credit report. However, to ensure an accurate assessment of your mortgage needs, it’s important to gather the following information for your conversation with a loan advisor: 1. Existing Mortgage Information: Make sure you have the most recent details about your mortgage, including: Current home value, Monthly Payment, Interest rate, Loan term, Loan balance, Mortgage origination year 2. Current Financial Situation: Even if you’ve had your mortgage for years, your financial circumstances may have changed. This could include new income, a job change, taking on or paying off debt, or improvements in your credit score—any of which could make you eligible for better terms. Be ready to discuss whether you can afford a higher payment to pay off your loan faster or if you’d prefer to lower your monthly payment. Having a copy of your current credit report and score will also be helpful for your advisor. 3. Future Plans and Financial Goals: Any significant life changes—like planning to move, get married, have a baby, or send a child to college—can impact your financial outlook and, in turn, your mortgage. Be sure to share any known upcoming changes so your advisor can provide the best advice. For instance, how long do you plan to stay in your home? Are you planning any major financial shifts, such as starting a business or a significant career change? The more information you can provide, the better your advisor can help you align your mortgage with your future goals. The Benefits of Refinancing If you’ve recently purchased or refinanced your home, you might already be in a strong financial position. But the only way to truly know if you’re making the most of your mortgage is by conducting a comprehensive review with a loan advisor. This review allows you to analyze your current situation, explore various scenarios, and determine the best course of action. One potential option your advisor may recommend is refinancing, which can offer a range of benefits, including: Lower Interest Rate For Mortgage Checkup Refinancing can lower your interest rate, potentially saving you hundreds of dollars on your monthly payments. During the pandemic, mortgage rates dropped below 3%, making headlines. While rates have begun to rise, they remain historically low. Refinancing now, compared to rates from 10 years ago, could save you thousands over the life of your loan. Shorten Your Loan Term: Refinancing to a shorter loan term, like switching from a 30-year to a 15-year mortgage, can help you pay off your loan faster and reduce the amount of interest you pay over time. Debt Consolidation: If you’re juggling multiple debts with high interest rates, refinancing might allow you to consolidate those debts into a single mortgage with a potentially lower interest rate. This can help streamline your payments and save money in the long term. Tap Into Home Equity: If you’ve built up equity in your home, refinancing could allow you to cash out some of that equity for major expenses like college tuition, medical bills, or home renovations. Eliminate PMI: If you’re paying for Private Mortgage Insurance (PMI), refinancing might give you the opportunity to cancel it—saving you hundreds of dollars each month. By scheduling an annual mortgage checkup with your loan advisor, you ensure that your mortgage still aligns with your financial goals and current situation. With all the changes in the economy and your personal life, the loan that worked for you last year may no longer be the best fit. Just like a health checkup, evaluating your mortgage regularly helps guarantee that you’re on the best path for your family’s financial future.