Right now there are many people contemplating the idea of refinancing. Many are attached to adjustable rate mortgages which are going to come due to adjust soon. Is it the time to refinance?

There are several reasons why people refinance. Changing the type of loan you have is one of them. Then of course, everyone wants a better rate than the one they currently have.

For anyone who is struggling to make a mortgage payment or expects their rate to increase, now is the time to refinance. There are a few things to keep in mind when you have decided to go ahead with this decision.

Take a look at your credit history. You need to be aware if there are any blemishes on it. If there are, keep it clean, pay on time and don't use credit cards or open new credit for at least three months.

Refinancing does cost the client money. Every time you refinance, there are closing costs to be paid. These can be rolled into the principal of the new loan but remember, the principal amount owed increases.

When you refinance, the procedure is the same as when you first applied for a mortgage. The same information has to be collected such as income, assets and credit. A new appraisal will have to be completed. Give your lender a copy of your original title and survey, usually you will receive a reissue credit for the title (a nice discount on title fees) and you will not need a new survey unless major work was done on the property such as a pool (most times a new survey is done at the time of installation of major changes).

If you are struggling to make your mortgage payment, now is the time to refinance. If your credit is too damaged to be accepted for a conventional loan, then ask your lender to try for an FHA loan. Although FHA requires more paperwork, they usually have very good rates and accept people with lower credit scores.

Right now, as many people will be turning to refinancing, you need to know your rights as a consumer. Do not let anyone talk you into a certain type of mortgage. You must be comfortable with what you are doing especially with what your new mortgage payment is going to be. Make sure that if you are approved for a refinance, that the rate quoted is the rate that is reflected on the mortgage papers at the closing. Many times a rate is quoted but the lender waits before locking it. In that period of time, the rates may go up and the higher rate appears when you are signing the papers. It is at this point you should not sign but must contact the lender. Many people have walked away from closing tables without signing because of this rate discrepancy only to return with the original promised rate.

For many considering refinancing, this can be the answer to the mortgage problems they have been or are about to experience. It is a very good time to explore your options.

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