Is it Time to Schedule a Mortgage Checkup?

When we say nobody likes going to the doctor for their annual physical examination, we mean nobody. Who likes endless exams and being inspected under a microscope? But to make sure your body is performing to its’ best capabilities, you must arrange an appointment every 12 months. Believe it or not, your mortgage could use an expert’s assessment every year, too!

Having a mortgage banker reassess the state of your finances might not be in the forefront of your mind at the end of the year, but it could be more advantageous than you might think. Everyone wants their mortgage to align with their current economic situation and goals, so as we draw closer to the end of 2021, it could be time to organize a mortgage checkup with your lender to ensure you’re on the right track.

Why Schedule a Mortgage Checkup?

No matter who you are, your economic situation changes over time. For example, perhaps your finances improve after starting a new job, earning a huge promotion, or finally seeing a return on your investments. But life-altering changes also influence your economic situation. If you get married or have a child, your economic situation is sure to transform.

Scheduling a checkup with a mortgage banker will make sure your mortgage aligns with where you are and what you can handle financially. Plus, it will set a plan into motion for where you hope to be in the future. Look at it like this: the meeting will be a tool to set yourself up for immediate and long-term budgetary success.

What’s Discussed at a Mortgage Checkup?

During the checkup, the mortgage banker will inspect every aspect of your current mortgage. They’ll ensure your loan’s present-day structure is working and not eating up more ready cash than it needs to. The mortgage banker always keeps in mind how they can set you up for permanent success, so they may ask you some questions about the following topics.

Interest Rates

Interest rates are in a constant state of fluctuation, so the mortgage banker will also look at your current interest rate and term. The rate you initially signed on for a few years and life-altering changes ago might not be the best one for you these days. If that’s the case, the mortgage banker might tell you to consider refinancingThe process of paying off your existing mortgage and replacing it with another in order to save money or pay off your loan sooner.refinancingThe process of paying off your existing mortgage and replacing it with another in order to save money or pay off your loan sooner. your loan.

Mortgage Payments

If you’re making more money now than when you submitted your mortgage application, you could increase the amount you pay every month to pay off your loan faster than originally planned. Just remember, ask your lender if there are any clauses or stipulations that would penalize you for paying off your mortgage more quickly. If outside circumstances make it difficult to make payments, lowering your monthly payment amount through refinancing is an option as well.

Your Future

One other component the mortgage banker will discuss is your plans for the future. Say, for instance, you and your family are thinking about purchasing a new home in the upcoming years. Maybe it’s because you're expecting a child and you want to move to a better school district. Or maybe your kids are all grown up and it’s time to downsize. Either way, the major financial and life decisions you see down the road will be discussed thoroughly.

Credit Score

Rounding out our list of potential topics the mortgage banker might discuss with you during a checkup is your credit score. Like interest rates and cash-flow, your credit score has the possibility of changing after the day you sign on for a home loan. If your credit score has improved, you might have the opportunity to lower your monthly mortgage payment.

The Mortgage Checkup’s Benefits

Apart from the advantages mentioned above, there are other benefits to scheduling a mortgage checkup. The meeting could result in switching to a loan term that better suits your financial plans or building a plan to eliminate your mortgage insurance (MI)Insurance that protects your lender if you can’t make mortgage payments.mortgage insurance (MI)Insurance that protects your lender if you can’t make mortgage payments.. Feasibly, the meeting could also lead to freeing up more of your money or leveraging your home’s equity. But no matter what, organizing a mortgage checkup will give you the peace of mind that you’re either in, will be in, or found the program that’s right for you...again!