Give your mortgage an annual once over

If the last time you looked at your mortgage was when you closed escrow, it’s time to take it out for an annual once over. The real estate market has changed considerably these last few months and you might benefit by refreshing your memory about what kind of loan you have and whether or not it still best meets your needs. Please give me a call and I can assist you in evaluating your options. Below are a few things we might want to consider as we evaluate your current mortgage.

Is a fixed rate mortgage the best choice for you?

Many of us opted for shorter term, adjustable rate mortgages when interest rates were historically low and when we thought we might be moving in 5 years or so. It might be time now to opt for the certainty of a 20 year or 30 year fixed rate mortgage.

Are you paying for Private Mortgage Insurance (PMI)?

Did you know that PMI is now tax deductible? Please check with your CPA to determine whether or not you can take advantage of this deduction. 

For those of you with impound accounts...

Even if your mortgage servicer is responsible for paying your taxes and insurance out of your escrow account, it makes good 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.

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

Many homeowners are making the proactive choice to secure a Home Equity Line of Credit (HELOC) for emergencies.  A HELOC is a revolving line of credit that only charges interest when you actually draw money from the line of credit. 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.

Looked at your credit report lately?

The information in your credit report has a huge impact on whether or not you will qualify for a mortgage loan.  That’s why it’s important to periodically check your credit report. I am happy to provide this service to you free of charge, so please call me at (415) 884-0321; or, you can take advantage of a recent amendment to the federal Fair Credit Reporting Act (FCRA) that 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.  (Free reports are being phased in over a nine month period, rolling from the west coast to the east beginning December 1, 2004.  By September 1, 2005, free reports will be accessible to all consumers.)

Is it time to refinance?

The timing might be right to refinance your mortgage loan.  Lower rates and/or new loan programs (like 40 year or interest only loans) 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! 

Together we can determine what course of action best meets your short term needs and long term goals.