Give your mortgage an annual once over

If the last time you looked at your mortgage was when you closed on your loan, it’s time to take it out for an annual once over.  New loan programs and opportunities to leverage your home equity can bring you lower mortgage payments and new investment opportunities.

Is a fixed rate mortgage the best choice for you?

Many of us opt for the certainty of 30 year fixed rate mortgage when we get our first mortgage.  It gives you the maximum long term tax advantage.  If you feel you want to pay off the mortgage quicker than that, all you have to do is start making an additional principal payment along with your mortgage payment.  Be careful to do the math for the tax advantage, based on your age.  We need that tax advantage the higher up the income ladder we climb.  You don't want to remove that advantage in later years of life.  If you need a better tax advantage then it may make sense to refinance and pull out some cash.  Check with your CPA to determine exactly how much cash you want to take out without losing the tax advantage!   
 

Are you paying for Private Mortgage Insurance (PMI)?

If you feel your property value has increased enough to eliminate PMI (20%) you can simply write your lender and ask them to do an appraisal on the property to confirm you have reached the mortgage to value ratio of 80% so they can eliminate further PMI payments.  It is an easy fix for the price of an appraisal and it beats paying closing costs again.  
 

Are your taxes and insurance up to date?

Even though your mortgage servicer is responsible for paying your taxes and insurance out of your escrow account, it just makes sense to periodically check to see that these payments are being made properly.  While you’re at it, you’ll want to review your homeowner’s insurance policy.  It’s a good idea to review your policy every two to three years to make sure it covers recent home improvements, replacement costs for the contents of your home, and that its reconstruction coverage is keeping pace with inflation in case the house were to be destroyed.  Also, check on the cost of Flood Insurance if you do not have it.  Florida is entirely in a flood zone, but only Zones V & A are required to carry it.  Call your insurance agent today and have a chat to make sure you are protected and up to date on coverage. 

Do you have a Home Equity Line of Credit (HELOC) for emergencies?

These lovely little gems are on the come back from extinction.  Many homeowners are making the proactive choice to secure a Home Equity Line of Credit (HELOC) for emergencies or special purchases.  A HELOC is a revolving line of credit that only charges interest when you actually draw money from the line of credit.  They are usually good for at least 10 years and cost almost nothing to open an account.  This is a great advantage when looking to pull equity out of your home.  As you repay the balance of the draw, the credit becomes available again.  Securing a HELOC in advance can be a great help if you’re ever laid off or have an unexpected medical or other emergency.

How’s your credit report?

The information in your credit report has a huge impact on whether or not you will again qualify for a mortgage loan.  That’s why it’s important to periodically check your credit report.

Now it’s easy to do so. A recent amendment to the federal Fair Credit Reporting Act (FCRA) mandates that each credit reporting company provide you with a free copy of your credit report, at your request, once a year.  To request your free credit report, visit http://www.annualcreditreport.com. 

Are you making the most of your home’s equity?

With rising home prices, you may have more equity in your home than you realize.  Taking out a home equity loan to payoff credit card debt, car loans and other higher interest debts makes good financial sense.

Is it time to refinance?

The timing might be right to refinance your mortgage loan.  New rates may help you significantly lower your monthly payment. Or you might want to “cash out” some of the built-up equity in your home, which you can use to consolidate debt, improve your home, take a vacation - whatever! Perhaps by refinancing you can even pay off your mortgage sooner! 

We will help you determine if the timing is right to change your loan program, considering your cash on hand, how likely you are to sell your home in the near future, and what effect refinancing might have on your future plans.

For further information, please send me an email at Sherry@SherryBitner.com or give me a good old fashion phone call at 941-504-1445.  It's a jungle out there...let me be your guide!