As mortgage rates slide below five percent for the first time in years, mortgage refinancing is an attractive option for many current home owners. It gives them a chance to lock in lower interest rates than their current terms and also to refinance the loan’s existing balance.
One of the most important things to consider when researching the refinancing of your home is your current equity position. The amount of equity you have will not only impact your ability to get home equity loans but also can impact whether or not you will qualify for a refinance. Most banks will not refinance your loan unless you have at least 20 percent equity.
This is just one factor that goes into deciding if you qualify for a home loan refinance, but there are others. For example, if your neighborhood has a relatively low amount of foreclosures, you are much more likely to be approved for a mortgage refinance than if you live in an area with a proportionally high level of foreclosures.