Refinancing will allow you to access the equity you have saved to make repairs or renovations to your home. You can even consolidate your high interest credit cards and other debts using this equity in your home. If you have a poor credit rating now, refinancing and paying off your debt will put you on the road to salvaging your credit.

Once you have decided to refinance, knowing where to start is half the battle. The first thing to do is make sure your credit reports are in order. Recent legislation in the United States requires each of the three credit reporting agencies to provide you with a free copy of your credit report each year. The three credit agencies are Equifax, Experian, and Trans Union. You can access your free reports at annualcreditreport.com.

Once you have requested these reports make sure the information contained is accurate. If you find errors on these reports you will need to dispute them with the individual credit agencies. You can improve your overall credit rating by reducing your debt to income ratio. The way to do this is to pay down the balances on your credit cards and close any unused or unnecessary accounts you have. One Example of accounts that drag down your debt to income ratio are department store charge accounts.

Once you have tidied up your credit, you are ready to begin shopping for mortgage lenders. There is a multitude of lenders to choose from and the market is extremely competitive. You might consider using a mortgage broker to find offers tailored for your individual circumstance. You can also use your favorite search engine to find lenders.

When comparing mortgage offers make sure you are comparing loans of similar term length and conditions. Also use the published Annual Percentage Rate (APR) to compare interest rates and fees; the APR factors in interest rate and lender fees allowing you to discern which loan is the best deal. When shopping for a mortgage loan make sure you are negotiating for favorable loan terms. Avoid loans with unfavorable fees and penalties such as prepayment penalties.

Louie Latour has twenty years of experience in the mortgage industry as a mortgage broker. He is the owner of Mortgage Refinance Advisor, a mortgage resource site devoted to saving homeowners money with free Mortgage Help guidebook “Five Things You Need to Know Before Refinancing a Mortgage.” http://www.refiadvisor.com

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