Refinancing Your Mortgage

One of the ways that some people at as a way to forestall foreclosure is to refinance. However, refinancing your mortgage is not always a walk in the park. First of all, it is important to realize that, even though mortgage refinance rates are low, you may not qualify for the best refinance interest rates. But you can move on from there. Here are some things that you need if you are interested in refinancing your mortgage:

1. Steady income. If you are interested in refinancing, you need to have a job.

2. Equity in your home. Your home should have some equity built up. With Making Home Affordable, you can get away with no equity in your home, but you have to qualify for the program. Most lenders want you to have at least 20% equity in your home.

3. Reasonably good credit. Your credit needs to be fair to excellent. Some mortgage lenders won’t accept fair. You will need to have a good payment history as well if you want to refinance.

4. Making Home Affordable. If you want to take advantage of Making Home Affordable, you will need a mortgage serviced by Fannie or Freddie. You can look up whether you are serviced by going to www.fanniemae.com/loanlookup or www.freddiemac.com/mymortgage.

You should start by going to your current mortgage lender and seeing what is available. Figure out your options. Whether you have good credit and are looking for a lower interest rate, or whether you are hoping that refinancing can help you improve your financial situation, your first step is to talk to your mortgage lender. And, if you feel that you can do better, consider shopping around.