Before You Do Anything Else

The first thing you should do is make sure your credit is in order. Request a free credit report from each of the credit bureaus and check the reports for accuracy. If you find mistakes on these credit reports you will need to dispute the errors.

You can improve your credit score by paying down the balances on your credit cards and closing the accounts. If you have credit cards that you dont need close them.

Make sure you are paying your bills on time and have at least six months of on time payments. Mortgage lenders look at your repayment history as part of determining how much of a risk you are. Paying your credit card balances down and making the payments on time is a simple step you can take to improve your credit score.

Another thing you can do to improve your situation prior to refinancing is save some money. If you have a savings account and can squirrel some cash away it will help your overall creditworthiness. You might consider cleaning out the garage or attic and selling items on eBay to raise some cash.

Do Your Homework

After you have your credit in order you need to do your homework and research mortgage companies and interest rates. Comparison shopping is easy using the Internet as a tool. When shopping for a mortgage it is important to compare loans of similar term length and use the published Annual Percentage Rate to compare fees.

Before you begin comparing loan offers you need to learn how mortgages work and what the terminology means. A free mortgage guide can bring you up to speed on the mortgage industry and the lingo. By doing your homework first you will be able to recognize a good deal and steer clear of the bad ones.