Welcome to 2016! Looking back on the last year, we’ve seen mortgage rates remain relatively unchanged, home values stayed steady and a new mortgage rule change was announced with its debut happening in February 2016. While weight-loss and getting organized are the top resolutions, spending less and saving more follow closely behind. On that note, if you have a mortgage, it should be on your radar in 2016. Multiple reasons may warrant an audit of your existing mortgage details and the New Year is just one of them. Consider the items below to determine if you could benefit from a mortgage check-up.
- Do you have debt you want to get rid of?
If you have available equity in your home, now could be a great time to get a debt consolidation. Rolling all of your debt into a low rate mortgage with a long amortization can drastically lower your overall monthly payments. Even with a payout penalty on your existing mortgage, you could still save money in the short and long term by centralizing all your debt into one monthly payment.
- Are you worried about job security?
It’s difficult to qualify for a mortgage when you’re newly self-employed; so if you were planning on making some changes to your mortgage and/or employment, you may want to take action soon while you are still able to qualify with third party income confirmation. This also applies if you’re worried about your job security and want to get your financial ducks in a row before an anticipated break in income. Accessing unused equity to use as a cushion while building your business or restructuring your mortgage to lower payments for a lapse in employment could make sense. However, do be aware refinancing can come with some costs, such as an appraisal, legal fees and a potential payout penalty on your existing mortgage term. If you are unable to make changes to your mortgage due to your employment situation, talk to an experienced mortgage broker who can offer financing alternatives for responsible borrowers.
- Do you have a 2nd mortgage with an unchanged balance?
If you have a 2nd mortgage behind your first mortgage, the New Year could be a great time to assess the value of consolidating two into one. Whether it’s private financing, or a home equity line of credit, it’s important to consider if there’s a better way to carry and pay down debt. If your balance is not going down as fast as you would like, consolidating them into one mortgage with a low rate and an affordable payment could put you in a better financial position by 2017. This will provide you with a set amortization period that will estimate the time it can take to pay off your balance in full as well as a fixed payment schedule.
- Are you having trouble making your mortgage payment?
Even with the new mortgage rules in place you still have options. This type of scenario usually involves a more in-depth consultation before a mortgage solution that suits you can be determined. There are a few possible avenues that can be taken and it’s important to start on the right path. Being in payment distress is a tough situation and getting ahead of the problem by contacting a professional with experience could ensure you are aware of all the solutions available to you.
- Have you improved your credit history?
You could be paying a higher rate if you originally got a mortgage when your credit score was low and your credit history was bruised, a mortgage check-up could be right up your alley. If you’ve improved a poor credit score enough to qualify for a lower interest rate you could be saving money every month! Time to contact a mortgage professional for some valuable advice.
- Are you thinking about buying a rental property?
If a rental property is part of your investment strategy in 2016, a mortgage check-up should definitely be on your list of things to do. Not only can you get a pre-approval to be prepared to shop for investment properties, you can also utilize the experience of your mortgage professional to explore some different mortgage solutions that maximize the potential cash flow of your new purchase.
- Do you know what is involved with refinancing your existing mortgage?
Some of the above items may lead to questions about possible payout penalties and the actual benefit of the above mortgage solutions. An experienced mortgage professional should be able to provide you with an amortization scenario taking into consideration a potential payout penalty to break your term and determining if it is still a financially sound idea to move forward with a mortgage adjustment. The first call to your mortgage professional should cover what is involved in the process including potential costs out of your pocket and the documents you could be asked to provide.d
It doesn’t take long to determine if your mortgage is in need of a check-up. Don’t be afraid to ask questions if you’re unsure of anything, now is the perfect time to get the answers you’re looking for.