One way or the other most of us have mortgaged our home and in these crunching times, it's more and more difficult to pay our annual percentage rate or APR. However, current trends indicate that mortgage rates have been dropping to record lows. In fact the average contract interest rate for a 30 year fixed-rate mortgage went down to 5.04% from 5.18%. For 15 year fixed-rate mortgage, the average contract interest rate decreased to 4.91%. While the average contract interest rate for 1 year is now only 6.36%. According to the Mortgage Bankers Associations or MBA, this promptly resulted to an increase in refinance applications which went up by a whooping 62%.



Mortgage refinancing means using your existing home to lessen the amount paid to your annual percentage rate without extending additional cash. But before you can apply for refinancing, ask yourself this question “is it really time?” The question below can give you an idea.

Is your mortgage rate one percent higher that the current rate offered? If the answer is yes, then go for refinancing. This one percentage is already a considerable savings on your part. If you have decided to go for refinancing, there are some things you need to consider as not everyone's application can be successful. The following questions will guide you:

How much is your yearly income? A lot of refinancing applications place heavy emphasis for this information. If you can provide details that you can amply pay for the mortgage rate, your application has more chances of being approved.

How much is your credit score? Current requirements for a credit score is 740 if you really expect to get a lower annual percentage rate. The higher the credit score, the lower the annual percentage rates offered.

How much is your home equity? In order to qualify for refinancing, you must a have minimum home equity of 3 percent. Sad to say but a lot of home owners now have negative home equity.

How much is your loan to value ratio? The ideal shouldn't be more that 80%. This means if you have a home worth $500,000 your loan should be $400,000 or less.

Even if you have a full percentage points down from your current mortgage rate, make sure there are no hidden charges which could eat up your gains. Fees charged with mortgage refinancing can be deceiving. To determine how much you'll e paying for the annual percentage rates, you can use an online mortgage calculator.

With the number of refinancing applications high and the number of mortgage lenders willing to take risk is low, its all the more difficult to find the best mortgage rates available. You have to be very patient and meticulous when searching. Luckily, Monitor Bank Rates provides this service. Monitor Bank Rates has an online mortgage refinancing search service, that's easy to use. Just select loan type, which in your case is “Refinancing” and provide your zip code and that's it. You'll be getting quotations for the best mortgage rates. Aside from these, Monitor Bank Rates has a lot of useful information on mortgages. The website is updated with the latest information on the financial industry that can help you.