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Step 1
If your credit score has gone up or if there has been a change in the market, look for changes in mortgage rates available to you.
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Step 2
Compare your current mortgage rate to other mortgage rates available. If the new mortgage rate is lower than your current mortgage rate, it typically is a good idea to refinance your mortgage.
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Step 3
Look at your expenses for month and see if you can pay more for your mortgage every month or if you need to pay smaller mortgage payments each month.
If you are looking to save money initially with shorter payments up front (but pay more interest overall) or if you can raise your monthly payments now and shorten the term of your loan, consider refinancing your mortgage. -
Step 4
Look for Fixed Rate mortgages available.
If you have an ARM (or adjustable rate mortgage) and can switch to a similar mortgage but with a fixed rate, this may be a good option for you if you are concerned about your mortgage rate changing as the market changes. -
Step 5
Check to see if there is a prepay penalty on your mortgage or if you are thinking about moving soon.
If you're planning on moving soon or if there's a penalty for paying off your mortgage, refinancing may not be a good option for you.
