Why Should I Get an Annual Mortgage Review?

Just as we make it a priority to have annual checkups with our doctors for our physical well-being, it’s equally crucial to dedicate time each year to evaluate our financial health. One key component of this proactive financial checkup is the annual mortgage review.

This proactive measure holds significant potential to positively impact your financial well-being and result in substantial savings over the long term.

Regardless of the type of home loan you have—be it a fixed-rate loan, adjustable-rate mortgage (ARM), VA loan, FHA loan, or any other—this annual review can be a transformative step.

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Annual Mortgage Review

Evaluate Your Financial Position

Conducting an annual mortgage review presents a chance to evaluate your existing financial situation. If you have significant financial decisions on the horizon for the upcoming year, such as funding college expenses, renovating your home, or investing in property, your mortgage loan becomes a pivotal factor.

Understanding the status of your mortgage empowers you to make well-informed decisions regarding accessing funds for any additional ventures.

Harness Home Equity

Home equity, often underestimated by homeowners, proves to be a valuable asset. Through your annual mortgage review, you gain insight into your home’s appreciation and accumulated equity. This data is crucial as it can serve as a reservoir for future financial endeavors.

For instance, if you plan to renovate your home, exploring options like a home equity line of credit (HELOC) or mortgage refinancing can provide access to necessary funds.

Strategic utilization of home equity allows you to finance projects at a lower interest rate compared to alternative borrowing methods, leading to potential long-term savings.

Prepare for Future Investments

Your yearly mortgage review presents an ideal opportunity to consult with a professional about your upcoming investments or significant financial decisions.

Whether it involves transforming your primary residence into an investment property, broadening your real estate portfolio, or delving into various investment prospects, your home can serve as a significant financial resource.

Your US Lending Company Loan Advisor can guide you in understanding how your existing mortgage loan and home equity can be leveraged to support these investments, potentially resulting in cost savings along the way.

Annual Mortgage Review

Manage Your Debt

Financial challenges are a part of life, and we all encounter them at times. Whether it’s mounting credit card debt, unexpected medical bills, or other unforeseen expenses, even the most well-intentioned individuals may face hurdles. Your mortgage review offers an ideal opportunity to discuss any challenges with a financial professional who can help you explore various options and potential solutions.

One consideration is consolidating your debt under your mortgage using the equity in your home. By combining your high-interest debts into your mortgage, you can enjoy a lower interest rate and a single monthly payment. This streamlined approach not only makes financial management more efficient but also saves you money on interest payments over the long term.

Alternatively, you may explore consolidating your debt through a home equity loan or a personal line of credit. Your US Lending Company Loan Advisor can assist you in finding the right financing solution tailored to your specific situation.

Save on PMI

If your mortgage initially required you to pay for private mortgage insurance (PMI) when you bought your home, conducting an annual mortgage review provides an opportunity to evaluate whether you qualify to eliminate this additional expense from your mortgage payments.

In many cases, once you’ve accumulated 20% equity in your home, you can request the removal of PMI. Although there are usually specific criteria for eligibility, this step can lower your monthly mortgage payment and result in long-term savings.

Your advisor is there to assist you through the process, determining your qualification to remove PMI. Keep in mind that mortgage insurance for FHA loans is handled differently by the Federal Housing Authority and cannot be removed.

Review Your Loan Terms

Your yearly mortgage review presents an opportunity to reassess the terms of your mortgage loan. For those with long-term loans, such as a 30-year fixed-rate mortgage, contemplating a shift to a shorter term, like a 15-year fixed-rate mortgage, can expedite the loan payoff and result in substantial interest savings over its duration.

This evaluation becomes especially crucial if you currently hold an adjustable-rate mortgage (ARM). During the review, you can scrutinize your existing rate and potential risks associated with rate fluctuations. Additionally, discussions about refinancing into a fixed-rate loan may arise, providing a stable interest rate that ensures consistent and predictable monthly payments.

Annual Mortgage Review

Discover Payment Options

Were you aware that by making an extra principal and interest payment each year, you could significantly reduce the duration of your mortgage?

This valuable insight is part of the knowledge gained during your yearly mortgage review. Many mortgages come with flexible payment options, and if your financial circumstances permit, you might have the opportunity to increase your payment amount or make additional payments, expediting the process of paying off your mortgage.

Monitor Interest Rates

Even with a fixed-rate mortgage, the impact of interest rates on your mortgage and overall financial well-being is significant. Your yearly mortgage review serves as an avenue to stay updated on prevailing interest rates and trends in the mortgage market.

By monitoring fluctuations in interest rates, you’ll be well-informed about opportune moments to consider refinancing or securing a more advantageous rate.

If your plans involve purchasing another home, a second home, or an investment property, this is an ideal juncture to discuss optimal timing for such transactions, the type of mortgage suitable for your needs, and strategies tailored to navigate scenarios involving higher interest rates.

Annual Financial Checkup

An annual mortgage review is a wise practice for current homeowners. It grants you the opportunity to evaluate your financial situation, harness your home equity, strategize for upcoming investments, address debt management, eliminate unnecessary expenses, explore alternatives for loan terms, stay abreast of interest rate developments, and much more. Surprising, isn’t it, how one small meeting can yield such significant benefits?

Homeownership requires active engagement, and the annual mortgage review ensures that your investment is optimized for favorable outcomes.

Combine this practice with a knowledgeable US Lending Company Loan Advisor, and you can maximize the benefits of your home loan, potentially resulting in cost savings along the way.

Schedule you Annual Mortgage Review Today

Schedule your Annual Mortgage Review Today

Then get in touch with us today! Any of our US Lending Company Loan Advisors are happy to help you in this regard.

US Lending Company is committed to providing the latest developments in the mortgage landscape and helping you save money and stay informed.

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