The Benefits of an Annual Loan Review

Do you offer your clients an annual loan review after their mortgages close? Now would be a good time to start. With interest rates forecasted to inch up throughout the year, many clients might benefit from refinancing.

Things Change

Rate changes are just one reason why revisiting mortgage structures may be beneficial for clients (e.g., moving from an adjustable rate to a fixed rate). Home values have also been on the rise in many parts of the country, which could lead some clients to pay mortgage insurance unnecessarily.

Improvements in household finances and credit scores might also enable you to find a more affordable financing structure for a client. This could also lead to a conversation about their ability to trade up if the right home became available.

Updating information about income and family changes can often have an added benefit. It’s a way to keep in touch. It can allow you to find out about an upcoming move or discuss options for financing an addition to the current home. Older clients may be thinking about buying a vacation property or might benefit from learning about reverse mortgage options.

Value for the Client

While staying top of mind and potentially rustling up new business is good for you, the advantages of an annual review for your clients are equally compelling.

Reviews offer the opportunity to:

  • Reduce monthly payments by eliminating mortgage insurance.
  • Shorten terms to speed up repayment.
  • Lower monthly payments with a different term or interest rate.
  • Access home equity to realize other financial goals.

In the end, the message you want to deliver is that the purpose of the review is to make sure a mortgage is still the best match for their long-term objectives and current financial situation.