If you find yourself with a lot extra debt, you could take advantage of a cash-out refinance loan. With this type of loan, you add on an amount to your home loan, refinance entire thing at a lower interest rate, and then take “extra” money out and pay off your debt. This will allow you to reduce amount of debt you owe (because interest rate will be lower), and at same time, reduce amount of monthly payment.

Most experts agree that you shouldn’t go to trouble or expense of refinancing your home if you don’t intend to stay in it for at least three years. Otherwise cost of process would likely be more than overall savings.

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Step Three: The Credit Information

It may be too late, and you may find that there are loans or other items on your report that you’ve never taken out. In addition, you may find that late payments are on your credit report when you’re sure that you made them on time. If you find such erroneous information, then you’ll need to send credit reporting agencies a letter explaining error, along with any proof or documents that you have that will back up your claim. They are required to investigate your complaint and report back to you with their findings.

It’s important to do all of this before you apply for a home mortgage. It will not only reduce amount of time that it takes to get an approval, but it could positively affect interest rate that you end up with.

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