Whether you want to lower your monthly payments, enjoy a lower interest rate or just free up some cash, refinancing your mortgage can be a great option to consider.

But before you dive in headfirst, it’s important to know that a refinance isn’t something you should go into blindly. If you want to ensure your refinance goes as smoothly and successfully as possible, you’ll need to do some preparation before taking the plunge.

Are you considering a home refinance? These tips will help you prepare for the process:

• Study your current mortgage — How will you get a better deal if you don’t know what your current deal is? Take some time to review your mortgage documents and understand what the terms of your loan state. The more you know, the better equipped you’ll be to evaluate your refinancing options.
• Look at your debts — What is your debt-to-income ratio? This is often a huge consideration for lenders, and it will play a big role in the options your lender presents. If you have low debt and high income, you’ll have more options. If you don’t, you may need to improve your debt-to-income ratio by paying off some debts before moving forward with a refinance.
• Get a feel for your credit — Your credit score, as well as your credit history, will heavily influence your loan options, so request this data early in the process. All three of the major credit reporting agencies are required by law to provide one free credit report to consumers every 12 months. All you have to do is ask them for it. Go to www.annualcreditreport.com to request your credit reports. The higher your credit score is, the better refinancing options you can expect.
• Determine what the best mortgage is — There is a number of mortgage options you can choose from, and the right one depends on your unique situation. You and your lender should discuss your finances, debts and goals in determining what type of refinance is best for you. Some options are better for saving cash, some can help you shorten your loan period, and still others can give you a cash-out sum you can use toward other endeavors such as paying a child’s college tuition. Sit down and do some cursory research on mortgages, and start to hone in on the one that’s right for you.
• Gather all your paperwork — Mortgage applications are pretty extensive. They require pay stubs, tax returns, bank account statements and a number of other financial documents. Before you get too far into the refinance process, take a few minutes to get your paperwork in order. Make sure you have everything you need.

Are you looking to refinance your home this year? Then contact Guardian Mortgage today to get started.