With interest rates being at an all time historical low, and the ability to compare lending institutions online with convenient comparison websites, a new home purchase or refinance is certainly attractive.  So what are mortgage lenders going to be looking at when you turn your application in?  For one thing, they will be concerned about your ability to repay the loan.  Taking into consideration your credit history, your monthly income, your existing debt, and your down payment, they will be looking at something called a “debt-to-income ratio”.  In other words, they want to know how much of your gross income will be relegated to paying off the mortgage, taxes and insurance every month.

Before you begin the process of refinancing, begin by finding a mortgage calculator online that includes an amortization schedule.  Does a fixed rate or an adjustable rate mortgage make more sense in your situation?  Can you afford a 15 year vs. a 30 year mortgage, saving you thousands of dollars in interest?  Does it make sense to purchase mortgage points?

It also pays to check out what analysts are saying about mortgage rate trends.  Waiting on a refinance is a gamble, but sometimes waiting pays off.  We are currently seeing historically low interest rates, but banks are also tightening up their lending practices as well.  These conservative tactics will likely not last forever, though; banks are still in business to make money.

The bottom line for consumers’ ability to enjoy low mortgage rate refinance rests in a number of factors.  It makes sense to spend some time investigating your options to see if it’s a good time to pursue a loan refinance.  Spend some time talking to a mortgage adviser to help you answer some of the questions surrounding your particular circumstance.  Make sure you take advantage of online resources to compare mortgage rates with different lenders.