The Annual Mortgage Review: Why You Need One

We’ve all heard those two words before. “Too soon.” But you know what can never come soon enough? Saving thousands of dollars over the course of your loan by scheduling a mortgage review TODAY. Even if you’ve recently purchased a home, it’s never “too soon” to meet with your lender to ensure your loan still suits your lifestyle and future plans. Your home’s equityThe difference between what your home is worth and what you owe on your mortgage.equityThe difference between what your home is worth and what you owe on your mortgage. could provide fantastic refinancing opportunities, and even shed light on ways to save on your mortgage.

What is a Mortgage Review? 

Think of mortgage reviews as sort of like a checkup with your doctor. Except in this case, the doctor isn’t a doctor...they’re your neighborhood Mortgage Banker. Instead of putting an ice-cold stethoscope to your chest or hitting your knee with a hammer for some strange reason, this checkup is all about strengthening your finances. 

When you schedule a complimentary mortgage review (even if your mortgage isn’t with Atlantic Bay), we’ll take a closer look at your current financial situation, cashflow, debt, and goals to make sure your mortgage is doing what it’s meant to do – ensure you have a happy home that provides security and builds generational wealth for you and your family. 

We recommend setting up a review every 12 months, but it won't hurt to workshop your mortgage and goals with your lender more than that – especially if there’s been a significant update in your life, such as marriage or an income change, or you have a large upcoming expense on the horizon. 

Mortgage Review Advantages 

Mortgage reviews can spotlight savings opportunities, offer up-to-date information on today’s loan options, and even review your credit report to verify accuracy. Here are just a few of the advantages of scheduling a review:  

Lower Payments 

An annual review could lead to lower monthly payments. Seriously. 

You might qualify for a lower interest rate than the one your loan currently carries, or maybe you’ve built enough equity (there’s that word again) to eliminate private mortgage insurance (PMI)An insurance policy that protects the lender in case you default on your loan. Mortgage insurance is required for FHA loans and for Conventional loans when you put down less than 20%.private mortgage insurance (PMI)An insurance policy that protects the lender in case you default on your loan. Mortgage insurance is required for FHA loans and for Conventional loans when you put down less than 20%..

Once your loan-to-value (LTV)The difference between the loan amount and the home’s market value. This helps lenders assess loan risk.loan-to-value (LTV)The difference between the loan amount and the home’s market value. This helps lenders assess loan risk. ratio drops to 80%, you can request PMI cancellation. This means you have 20% equity in your home. If you’ve made your loan payments on time, you should hit this amount at a date pre-calculated in your PMI disclosure and included with your paperwork when you closed your loan. Your lender or servicer should also be able to provide you with this date, should you need to know sooner than your annual review. 

Shorter Term 

Many loans fall under the category of 30-year fixed term, but now that some time has passed since the purchase of your home, a shorter term may be right for you. A shorter loan term could help you pay off your balance faster and save on interest charges over your loan’s lifetime.  

Expert Tip

Refinancing to a shorter term will mean higher monthly payments, and your current income must be enough to qualify for the new loan. However, you can get a better rate, and you’ll definitely save money in interest over the life of the loan.

Cash Out 

Sitting down with your lender could reveal that you have built enough equity in your home to refinance and use the funds towards other expenses. Don’t' worry, we’ll explain. 

A cash-out refinance is a type of refinancing in which 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. 

A cash-out refi can help in many ways, like when a large repair is necessary, a major life event occurs, or you simply want to better your financial future by paying off high-rate debt. Stick around the Knowledge Center to learn more about applying for a cash-out refinance and remember – it’s never too late to refinance.  

Another Mortgage? 

Who knows? There’s a possibility that a mortgage review could show that you’re in a position to take out a second mortgage for an investment property or vacation home. As a homeowner, you’ve already experienced the mortgage process once, but applying for (and managing) a second loan will be just a little different and certainly comes with its own challenges and benefits. Discuss with your Mortgage Banker thoroughly before making a decision.  

Peace of Mind 

Sometimes, a mortgage review may reveal that your loan and all its accoutrements are perfect for your situation. You’ve got the best rate, term, and payment amount possible, and you’re on track to meeting your financial goals. If that’s the case, great! Now you can have confidence that your spending habits are efficient and your money isn’t getting wasted each month. 

Ready to take a closer look at your mortgage? Gain peace of mind sooner, not later, and schedule your review today!