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Why You Should Do an Annual Mortgage Checkup

Written by:  

Lauren Hargrave

Lauren Hargrave

Lauren Hargrave

Personal Finance Writer

Lauren Hargrave is a writer from San Diego who focuses on technology, finance, and healthcare. She worked in finance for seven years before pivoting to a career in writing, and now, instead of putting numbers into spreadsheets, she writes about them instead.

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Fact Checked by:  

Dan Silva

Dan is the Vice President of Marketplace Lending at Own Up. Throughout his career, he has held executive leadership positions in the mortgage and banking industry.

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It’s common for us to take proactive care of our physical health. We go for annual checkups at the doctor and regular teeth cleanings at the dentist – we think of our physical health as something that needs ongoing attention and care. This is all great and means we’re more likely to stay physically healthy. But did you know your financial health needs the same type of attention?

One aspect of your finances in particular that could use an annual checkup is your home loan (or mortgage). While credit cards and other revolving debt items are things that get used (and hopefully paid down or paid off) regularly, you probably have a 15-year mortgage or a 30-year mortgage that you haven’t revisited for a while. Most likely, you signed the paperwork for your home purchase during the closing and probably haven’t thought much about it outside of making your monthly payments. But with years to go on those payments, there’s a chance you may be leaving money on the table. An annual check-in with a mortgage advisor can help to figure this out.

What is an Annual Mortgage Checkup?

An annual mortgage checkup is a meeting you can schedule with your mortgage advisor on a yearly basis. During the meeting, the mortgage advisor will review the home loan terms on your existing mortgage and discuss any changes to your financial situation in order to ensure your loan, as it’s currently structured, still makes sense for you.

In addition to reviewing your mortgage details and changes to your financial picture, your mortgage advisor will check your credit score, your interest rate compared to current interest rates, and any new loan products that could be beneficial for you.

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What Information Do Homeowners Need for an Annual Mortgage Checkup?

In order to see if there are any better mortgage options available to you, there are some pieces of information you may want to gather in advance. To help you prepare, here are some questions your mortgage advisor or mortgage broker could ask about and why:

Has Your Income Increased Since You Closed Your Loan?

If so, you might have room in your budget to pay down your mortgage faster. This could save you thousands of dollars in interest in the long run.

Has Your Income Decreased Since You Closed Your Loan?

If so, you may want to see if you can refinance your home mortgage at a lower interest rate or request a loan modification, which is an adjustment to your loan terms, from your mortgage lender. If you have an interest in pursuing a loan modification, make sure you understand how it may impact your monthly payments and the total cost of your mortgage over time.

Has Your Credit Score Improved Since You Closed Your Loan?

If so, you may be able to refinance your loan at a lower interest rate.

Have Home Values Increased In Your Area?

If home values have significantly increased in your area, your home value could have increased as well. This is important for two reasons.

  1. First, if you were required to purchase private mortgage insurance (PMI) because your down payment was less than 20% of the purchase price, an increase in your home value, according to Experian, could allow you to get rid of your PMI.
  2. Second, an increase in home values could mean you have equity available to help pay for big-ticket items like home renovations or college tuition.

What Are Your Future Plans For The Home?

If you’re planning to move in the near future and want to sell your home to finance that move, it might not make sense to refinance your mortgage. Alternatively, if you’re planning to stay in your home for a while and want to complete some home renovations to improve its quality, you may want to refinance your mortgage to free up cash.

What Are Your Financial Goals?

These could include paying off your mortgage sooner, starting a business, or retiring earlier. No matter your answer to this question, your mortgage advisor will take it into consideration when giving you guidance on how restructuring your mortgage could help you achieve those goals.

What are the Benefits of Conducting an Annual Mortgage Checkup?

We get it, you’re busy and scheduling yet another meeting may feel like a heavy lift. But there are many benefits to conducting an annual mortgage checkup with your mortgage advisor. They include:

Saving Money

There are a few circumstances that could open up the opportunity for you to refinance your loan for a lower interest rate.

  • Mortgage rates overall have dropped below where they were when you signed your mortgage documents.
  • Your credit score has improved since you originally took out your loan.

In either situation, you may be able to lower your monthly payments by refinancing your current mortgage with a lower interest rate.

Reducing Debt Faster

If your financial position has improved, you may be able to pay your mortgage down faster by making larger monthly mortgage payments than you have been. However, whether or not it’s a good idea to pay down your mortgage faster will depend on the loan terms and where your interest rate sits versus where market interest rates are. A mortgage advisor can help you think through this.

Debt Consolidation

If you’ve increased your equity in your home and you’ve acquired other debts with high interest rates that you’d like to pay off, you could leverage that equity with a mortgage refinance and pay down or pay off that other debt.

Saying Goodbye to PMI

This will also save you money. If your equity in your home has reached 20% or greater, you could be eligible to drop your private mortgage insurance, which will rid you of a monthly expense.

Restructuring Your Mortgage Terms to Better Fit Your Current Financial Picture

For example, if you have an adjustable rate mortgage, and you're worried about future rate increases, you could refinance for a 30-year fixed rate mortgage instead. Your mortgage advisor can help introduce you to mortgage products that might work better for your financial situation or increase monthly cash flow.

The Bottom Line

Your finances, the real estate market, interest rates – they all change from year to year. So it’s important to check in regularly to ensure you’re not only getting the best deal you can, but also that your mortgage is in alignment with your current financial picture and goals.

Your home loan isn’t just a debt that enables you to buy a house, it can also help you achieve other goals and dreams. Schedule your annual mortgage check in with your mortgage advisor today.


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The information provided to you in Own Up blog is intended to be for general informational and educational purposes only and does not constitute legal or tax advice. This blog is not a substitute for obtaining legal or tax advice from a qualified professional. The views and opinions expressed on this blog are solely those of the authors and do not necessarily reflect the official policy or position of Own Up or describe Own Up's business model. Own Up makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the blog or the information, products, services, or related graphics contained on the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk.