The Top 5 Benefits of an Annual Mortgage Review

Your mortgage is one of the best tools you’ll have to build financial security. But it’s not something you should just “set and forget.” Your life circumstances, the markets, and tax deductions change over time, so an annual mortgage review (complimentary, by the way!) is a great chance to make sure your mortgage is still meeting your needs. Let’s take a look at five ways this simple session can mean big benefits! 

Expert Tip

Even if your mortgage is not with Atlantic Bay, we’re happy to assist!

A Trusted Guide  

It’s tough for busy people to sit down and evaluate their mortgage. At Atlantic Bay we work every day to stay on top of rates, market news, and home values. We’ll apply that knowledge to your updated financial situation, cashflow, debt, and goals to make sure your mortgage is helping you build wealth for you and your family. 

By the way, we recommend setting up a review every 12 months, but feel free to reach out if there’s been a significant update in your life, such as marriage or a job change, or you have a large expense on the horizon.  

Lower Payments  

Who doesn’t love lower payments? Depending on your situation and the markets, you could qualify for a lower interest rate than your current one, which can mean big savings for the remainder of your loan. 

To achieve this, you’ll need to apply for a rate-term refinance, which means you’ll have a whole new mortgage, including closing costs, but your savings will make up the difference within a few years. Your Mortgage Banker can help determine if refinancing now is right for you. Bonus: If you bought with Atlantic Bay as of October 2022, our Lend it Back program provides up to $1,000 toward your closing costs. 

If you’ve had a Conventional loan for several years, by now, you might have enough equity to get rid of private mortgage insurance (PMI). Once your loan-to-value (LTV) ratio drops to 80%, you can request PMI cancellation. The date you reach this percentage is in the paperwork from when you closed your loan, or just ask your Mortgage Banker. 

Expert Tip

If you have some cash saved up, and a Conventional mortgage, you might consider a mortgage recast. For a small fee, you'll make a lump-sum payment toward your balance to enjoy new, lower monthly payments with the same rate and term – no refinance needed.

Shorter Term  

Chances are, your original loan term was 30 years, but you might decide a shorter term, like 20 or 15 years, may be right for you now. Your monthly payments will be higher, but rates are lower for shorter terms. You’ll pay toward your balance faster, and you’ll save on interest because you have fewer years with a mortgage. Again, a refinance will be necessary, but your Mortgage Banker can help you see if the upfront costs are worth it. 

Cash-Out Refinance 

If you need funds to make home improvements, pay down debt, or cover a big expense, and you’ve built up your equity (which is likely because of rising home prices in the last several years), a cash-out refinance could be a good move.

A cash-out means you take out an entirely new, bigger loan to replace your original mortgage, and you pocket the difference at closing. The amount you receive depends on your equity, financial profile, and loan program. 

Another Property 

A mortgage review might show that you’re in a position to purchase that dream vacation home or rental property for additional income. As a current homeowner, you know that applying for (and managing) a second mortgage means more financial responsibility, but your Mortgage Banker can walk you through all the steps. 

Prepping for Your Review 

One way to ensure a smooth review is to prepare a little paperwork. Your Mortgage Banker will have a form you can fill out; in the meantime, consider the following: 

• Have you had any big life changes? (new baby, college-aged children, divorce, inheritance) 

• Has your employment or income changed?  

• What’s the approximate value of your home? 

• What’s your approximate remaining balance and rate? 

• How long do you plan to stay in your home? 

• What are your long-term financial goals? 

In the end, you may find that your mortgage is just fine and dandy as it is. That’s great! Now you know your spending habits are efficient, and your Mortgage Banker has updated information for when you decide to make a change. 

Ready to take a closer look at your mortgage? Reach out to Atlantic Bay to schedule a review today!