As a homeowner, it’s important to stay on top of your finances. This includes periodically checking to ensure that your current mortgage is still the right fit for you. If your goals or situation have changed or if better mortgage options have become available, it may be time to reassess your mortgage to see if you could benefit by refinancing into a new one.

A recommended way to evaluate your mortgage is through an annual mortgage review with your loan officer. This typically consists of a short chat over the phone to briefly discuss your financial and homeownership needs, plans and goals and compare the mortgage you have now against the current options. Your loan officer will then provide a recommendation as to whether you should keep your current loan or consider a refinance.

Here are some of the refinance benefits you might discover during your annual mortgage review.

LOWERING YOUR MONTHLY PAYMENT

Mortgage rates are always changing, and your credit scores can change, too. If mortgage rates have fallen or your credit scores have improved since you obtained your mortgage, you may qualify for a lower rate. That means you may be able to refinance your mortgage and reduce your monthly payment to save money over the life of your loan.*

TAKING CASH OUT

If you’ve built up enough equity in your home, and you need some extra funds, a cash-out refinance may be a good idea. With this type of refinance, you can replace your current mortgage with a new one for more than you currently owe and receive the difference in cash. You can use this cash to renovate your home, cover college expenses, pay off high-interest debt or anything else.

FIXING AN ADJUSTABLE RATE

If you have an adjustable-rate mortgage (ARM), your interest rate and your monthly payment can fluctuate according to market rates and the terms of your loan. This may be fine during your ARM’s fixed-rate intro period or if market rates are steady or falling, but if rates rise during your adjustable-rate period, your monthly payment may rise too. That’s why now may be a good time to refinance an ARM into a fixed-rate mortgage to gain the stability and peace of mind of a rate and a monthly principal and interest payment that will never change for the life of the loan.

REMOVING MORTGAGE INSURANCE PREMIUMS

If your monthly mortgage payment includes a mortgage insurance premium, there’s good news! After you’ve built up enough equity in your home, you may be able to get rid of your mortgage insurance payment. Refinancing your mortgage is one way to remove mortgage insurance early if you have a conventional (non-government) mortgage, and it’s the only way to remove mortgage insurance from an FHA loan or the annual fee from a USDA loan. The bigger your mortgage insurance premium, the bigger your potential savings.

CONCLUSION

It’s always wise to get an annual professional opinion on your mortgage to see if you can lower your monthly payment* or obtain other benefits from refinancing. If you’re ready for your mortgage review, get in touch today!

* By refinancing a mortgage, total finance charges may be higher over the life of the new loan. Contact your Draper and Kramer Mortgage Corp. loan officer to discuss the total expected costs and savings of your refinance.