Mortgage Refinancing: How to Go about It

Mortgage refinancing seems like a great idea for many homeowners. More people are choosing this option because of the benefits it offers. In fact, refinancing forms a big chunk of the total mortgage applications in America.

Financial experts agree that refinancing is a good decision, depending on an applicant’s circumstances. Here are some factors to think about before refinancing your mortgage in Salt Lake City, Utah or any other locations in the US.


One major criterion is the amount of equity that an applicant has invested in his home. In many states, sale prices of homes have dropped and caused problems. People owe a lot more than their homes are worth and are not able to get financing. Those with 15% or more equity can qualify easily.

Credit Scores

Lenders have raised their approval standards. A score of 720 or higher is now mandatory to get low-interest rates. Those with a lower score pay a lot more for their loans.


Lenders look at the income-debt ratio as a part of the vetting process in mortgage refinancing. Applicants are advised to pay off as much of their debt as possible and bring it below 40% to qualify for refinancing.

Costs Associated with Refinancing

There are quite a few costs associated with loans and these can be reduced. Shopping around is a good idea, as this helps you find the best deal. Negotiate for the most affordable and convenient refinancing rate.


Many borrowers try to reduce payment of federal taxes by deducting mortgage interests. Refinancing will reduce the amount that can be deducted. It is a good idea to talk to a CPA or a tax advisor before going ahead with refinancing.

Refinancing is a complex process and homeowners need to make informed decisions. Ask your lending company about the process and the requirements.