If you have not taken advantage of the lower interest rates you may benefit from refinancing your home loan. You will pay about $100 a month less on your mortgage payment for each percentage drop in the interest rate. You dont automatically qualify for a refinance loan. You must have an excellent credit score to qualify for the lowest interest rates. You must have steady income and not much debt. You will need to find a lot of paperwork before we begin with the first of the steps below.

You will need:Mortgage paperwork and statementAll loan statements besides the home loan, including credit card statementsCopies of checking, savings, and retirement accountsPay stubsIRS records for the past two yearsStep 1: Put your income and asset documentation in one pile and your debt and liability statements in the other pile. Your income tax return and your bank information will go in the income/asset stack.Step 2: Call your lender to find out if they offer refinance options. You can use this lender if you like and they offer refinance products. You will want to make sure that your lender will match or beat any offers from other lenders. Be sure you call at least two other lenders.Step 3: The loan officer will ask you basic questions to begin the process. You will need to give him your social security number, the pay off amount of your existing loan, and a rough estimate of your monthly income and your monthly bills.Step 4: Your lender will need written consent to pull a credit history. Your credit score will determine the rate of interest that the lender will offer you on your note. The higher that your score is (700 or higher), the better interest rate you will get. If you have poor credit, as evidenced by scores lower than 600, you will be quoted a higher rate of interest.Step 5: You lender will ask for permission to obtain the current market value of your home. You will have to pay for the appraisal that the lender requires. Your lender will be trying to determine that you meet the eligibility requirement of having 20% equity in your home.Step 6: All the paperwork that you gathered up will need to be copied and sent to the lender with the application for refinance. The lender will review and verify the amounts that you estimated in Step 1. He will calculate a debt-to-income ratio for you. If you have a ratio that is 36% or less you will probably qualify for refinancing. The debt-to-income ratio is determined by dividing your debt and your income to arrive at a percent value. The lower your debt the better chance you have of qualifying for refinancing.Step 7: If you have been approved for the refinancing the lender will set up a time and date for closing on the refinancing loan. Once you have understood and signed all the requisite documentation at closing, you will begin repayment on your new refinanced loan.