When to Reevaluate Your Mortgage
A mortgage is a type of loan used to purchase or refinance a home. A mortgage can last anywhere from 10 to 30 years. This can feel like a lifelong contract, which is why it is important to reevaluate your mortgage regularly.
There are a few signs you should look out for to know when it’s time to reevaluate your mortgage:
Increased Credit Score
You can qualify for a lower rate if your credit score is higher than it was when you applied for the loan. Credit is very important to lenders because it is a representation of how well you manage debt. Lenders will look at your credit score before they offer you an interest rate to see how reliable you are. The higher the score, the better the interest rate will be. If your credit score is higher than when you applied, you may opt to refinance.
Interest Rates Drop
When interest rates on home loans significantly drop, it is the perfect time to reevaluate your mortgage. Your interest rate is a big factor in how much money you end up paying for your home. If you are in a loan where the rates are high, you could be overpaying for your mortgage. Even being able to drop a few percentage points on your interest rate can save you thousands.
Difficulty Making the Mortgage Payment
One of the best ways to lower your monthly mortgage payment is by refinancing to a longer-term. The longer the term, the shorter the payments will be. Paying less per month is more convenient, but it also means that you will end up paying more in interest through the life of the loan. This is why you should only refinance to a longer-term loan if you are certain that you can no longer make the monthly payment of your current loan.
These are just a few examples of some of the best times that you should reevaluate your mortgage loan.
Want to learn more? Contact us today for more information on when you should reevaluate your mortgage loan.