Annual Mortgage Review
Getting a mortgage means you’ve committed a major investment of your time and energy, not to mention cash, before closing and being handed the keys to your new home. Afterwards, the monthly mortgage payment becomes one of the biggest financial obligations that most consumers will face in a lifetime.
What some people might not know is that your mortgage should be reviewed annually to see if it can be refinanced or managed in a way that will save you money, or achieve other financial objectives, in both the short and long term.
By requesting a mortgage review, you’ve taken the first step toward looking at the big picture concerning your loan and possibly freeing up some cash for life’s uncertainties.
A Hamilton Mortgage Loan Advisor will take a look at the term of your loan, the payment you make, the taxes you pay and the insurance coverage you have. Your Loan Advisor can also check your credit to see if anything has changed (for better or worse) and the current value of your home. Based on that information, there may be options available to you.
What’s a Mortgage Review?
A mortgage review is an in-depth analysis of your monthly payment details and includes factors mentioned earlier, including your credit, mortgage insurance and your income. Based on those and other factors, a Mortgage Loan Advisor will discuss the options available to you and if there are opportunities to save you money on your mortgage or put you in a better financial position.
Following are a few examples of options that may be available to you after your mortgage review has concluded and what, if any money, you can save or redirect toward other monthly financial obligations, savings or investments.
Shorten the Term of Your Loan
Let’s say you’re paying $1,700 a month at 4.6% and you have 15 years left on your mortgage. What if you could lower your interest rate and free up cash for other expenses or pay the same amount in mortgage payments and cut years off the remainder of your term?
That’s just one example of how a mortgage review can uncover opportunities just like that. Shortening the term of your mortgage can get you closer to living life without a mortgage payment that much quicker. Who wouldn’t want that?
Lower Your Interest Rate
There are plenty of reasons you might want to lower the interest rate on your mortgage payment. Some people may want to refinance to pay off credit card debt or redirect newly freed up funds into in a retirement account. An added bonus of paying down debt is the potential boost to your FICO score, which, in turn, may provide access to other lines of credit should you need them.
No matter what your financial goals are, lowering your interest rate puts money back in your pocket and one way to do that is with an annual mortgage review. It’s simple. Lower your interest rate, lower your monthly payment, and free up cash every month for other things.
Cash-out Refinance
If you have more than 20% equity in your home, you might be a good candidate for a cash-out loan. A cash-out loan could provide funds for a number of big-ticket expenses.
- Paying for a child’s college tuition and expenses
- Wedding expenses
- Home renovation projects
- Paying off high-interest credit cards
Whatever your goals are, a cash-out option is a great way to get a low interest loan to pay off higher-interest-rate expenses.
Mortgage Insurance
Lots of folks have to pay Private Mortgage Insurance (PMI), which can add hundreds of dollars each month to their monthly mortgage payment. What most people don’t know is that paying PMI is not a life sentence for as long as you hold a mortgage.
What if after speaking with a Hamilton Loan Advisor, you’re told that after a new appraisal, you find out that your property value increased enough to move your loan-to-value ratio below 80%? Guess what? With PMI gone, you now have a few extra dollars each month to spend as you see fit!
The Takeaway
The terms of your mortgage loan are not necessarily fixed in stone. A Hamilton Mortgage Loan Advisor may help you uncover options to put money back into your pocket each month.
We have the resources that could get you started on a path toward more financial freedom and it all starts with an annual mortgage review. Feel free to reach out to a Hamilton Mortgage Loan Advisor today. For more information, click here.