Just like we make a priority of our physical health with yearly checkups from the doctor, we should dedicate time each year to evaluate our financial well-being. One integral aspect of this financial checkup is the annual mortgage review.

Taking this proactive approach can significantly influence your financial well-being and lead to substantial savings in the long run. Whether you possess a fixed-rate loan, an adjustable-rate mortgage (ARM), a VA loan, an FHA loan, or any other form of home loan, conducting this review can be transformational.

Assess Your Financial Situation

The review allows homeowners to assess their current budget, taking into account changes in income, expenses and overall financial stability. This awareness is the foundation for effective financial management.

If you’re anticipating significant financial obligations in the coming year, such as funding college expenses, renovating your home or acquiring an investment property, your mortgage loan becomes a crucial consideration. Being aware of your mortgage status empowers you to make well-informed decisions regarding accessing funds for additional endeavors.

Leverage Home Equity

Home equity is a valuable asset often underestimated by homeowners. By assessing your home’s appreciation, it can serve as a potential resource for current or future financial challenges or opportunities.

Plan for Future Investments

The annual mortgage review provides an opportune time to engage in discussions about upcoming investments or significant financial decisions. If you’re contemplating turning your primary residence into an investment property, broadening your real estate portfolio or delving into alternative investment opportunities, your home can serve as a significant source of financing for these ventures.

Eliminate Private Mortgage Insurance

Often, when you have accumulated 20% equity in your home, you have the option to request the elimination of private mortgage insurance (PMI). If you were required to pay for PMI at the time of your home purchase, an annual mortgage review provides a chance to assess your eligibility for removing this extra expense from your payments.

While specific eligibility requirements apply, this step has the potential to decrease your monthly mortgage payment and result in long-term savings. Note that the rules for mortgage insurance on FHA loans differ. Consult with your loan officer about solutions for cases like these.

Explore Loan Term Options

The annual review of your mortgage is often a convenient time to reconsider the terms of your loan. For those with a long-term loan, like a 30-year fixed-rate loan, shifting to a shorter term can expedite the repayment of your home loan and result in substantial interest savings.

For those with an existing adjustable-rate mortgage (ARM), the annual mortgage review is even more important. It allows you to evaluate your existing rate and the potential risks associated with rate fluctuations. It may also be the time to consider refinancing into a fixed-rate loan to gain the benefit of a stable interest rate and a consistent and predictable monthly payment.

Reviewing your mortgage with your Guarantee Mortgage loan officer offers many benefits. We hope to hear from you soon and help you achieve financial success through homeownership in 2024. Contact us today for your annual mortgage review.