Top 10 tips for finding a home loan refinance

Finding it hard to resist mortgage interest rates below 5%? You're not alone if you want a home loan refinance. Here are the top 10 tips to making sure your home loan refinance experience goes smoothly.

Home Loan Refinance Tip #1: Figure out how much equity you have. Get your property's value assessed and find out from your Realtor what the comps in your area are selling for as opposed to what they're listed for. Does your neighborhood have a lot of foreclosures? If so, expect your home value to have dropped in price, which can affect your home loan refinance. Most lenders today won't do a home loan refinance unless you have at least 20% equity and have proof of income.

Home Loan Refinance Tip #2: Make sure your credit score and income qualifies you. Because of the housing crisis fallout, lenders have stricter credit and income requirements. Get your credit and debt-to-income ratio in order before even beginning to think about entering the home loan refinance process.

Home Loan Refinance Tip #3: Prioritize your home loan refinance goals. Whether you want to lower your monthly payments or reduce your loan term, figure that out first to make sure you meet those goals with your home loan refinance.

Home Loan Refinance Tip #4: Don't assume you can't get a home loan refinance if you are under water with your mortgage. Even if your property's value is less than what you owe on it, it is still possible to get a home loan refinance. If you have a mortgage that is owned or securitized by Fannie Mae or Freddie Mac, you might still be able to qualify. Some federal programs even allow you to get a home loan refinance if your mortgage is 125% of your home's value.