As the housing economy continues to recover from the shock of a bubble burst several years ago, there are a number of things you can do to ensure you are getting the best mortgage for your money. Refinancing is an option for many homeowners and can actually help improve your rates and lower your payments. The Mortgage Bankers Association is responsible for refinancing options on many home mortgages and has been experiencing an influx in applications from homeowners lately. In order to get the best terms, there are a few things to keep in mind when considering your options.

Even if interest rates are at an all-time low, it may not be the best time for you to refinance your mortgage. It is important to take your entire financial situation under consideration in order to ensure that it is the best time for refinancing your household. If your current mortgage is a full percentage point higher (or more) than the current rates, it may be a good time to reconsider your terms. You will have to keep in mind that transaction fees are another element and may actually take away from the savings you gain with your new reduced mortgage rate.

Secondly, keep in mind that even though record numbers of Americans are applying for refinancing terms, there are only a few applications that will be approved. Over 60% of new terms for existing mortgages were turned down by lenders in recent years. This contributes to extra anxiety in the process and may be detrimental to your credit in the long run. Borrowers want to ensure that they have a FICO score of at least 740 in order to qualify for the best rates.

Next, make sure that you have home equity and documentation of your property's worth. In order to qualify for mortgage refinance terms, you will have to prove that you owe less on your home than it is actually worth. Or, to put another way, you will have to prove that your home is worth more than what you owe. Add this to proof of adequate income and you will make sure you qualify for new terms.

Lastly, make sure that you qualify for beneficial fee paying options and don't end up eating into your mortgage savings with high processing fees. There are usually three main options for paying the fees. Whether you choose to pay them up front or opt for a higher interest rate, shop around for the lowest fees available.

By: aayana

http://www.charlesmartinmortgage.net/refinancing.html