Annual Mortgage Checkup

It’s a new year and a time of significant change in our world — but what about in your life? In the past year, you may have experienced shifts in employment, had a baby, been married, been divorced, or reached retirement age. These are events that can completely alter the course of your life, and yet your mortgage may have remained the same. This time of year, many of us schedule routine annual maintenance, but have you scheduled an annual mortgage checkup?

What Is a Mortgage Checkup?

A mortgage checkup is a review of your current home loan to determine whether it still makes sense given your current financial situation and goals. Just as your financial circumstances evolve, the mortgage products available in the market also change. An annual review ensures your mortgage is still working for you — not against you.

Has Your Credit Improved?

If your credit score has improved significantly since you took out your mortgage, you may now qualify for a lower interest rate through refinancing. Even a 0.5% reduction in your rate can translate to significant savings over the life of the loan.

Have Interest Rates Changed?

Monitor prevailing interest rates. If rates have dropped substantially since your original mortgage, refinancing may lower your monthly payment or allow you to pay off your loan faster. Conversely, if you have an adjustable-rate mortgage, check whether your rate is due to reset and whether it makes sense to convert to a fixed rate.

Has Your Home Value Increased?

Rising home values build equity, which can open up new options. You may be able to eliminate PMI once you reach 20% equity. You may be able to access a HELOC for home improvements or other needs. Or, if you’ve been considering selling, now may be the right time to explore your options with an Avonya agent.

Has Your Financial Situation Changed?

Major life changes — a raise, a job change, a new family member, an inheritance — may mean your mortgage strategy should change too. Consider whether making extra principal payments, refinancing into a shorter term, or other adjustments make sense given where you are today.