Define your Goals

• If you want to refinance to get a different loan program--from an adjustable to a fixed rate, for example--let your mortgage broker know.
  
  Stick to your guns. If you don't want to touch your equity, don't be swayed by unscrupulous lenders or brokers. For instance, if you want cash out to pay off creditors or take a trip, communicate how much equity you intend to take from your home, and don't be talked into taking out more equity than you want or need.
  
  If you want to leave your equity in your home and refinance for a shorter mortgage term, that option may be available.
  
  Even though you're in control of your situation, you do have to be realistic. Don't expect a low fixed-interest-rate loan if you have bad credit.
  
  

Selecting the Right Broker

• Not all brokers have high ethical standards. Check the reputation of your broker before proceeding with your refinance.
  
  A good mortgage broker will be able to show that he is licensed by your state regulatory board. A good broker will always have your best interests in mind.
  
  Also, any mortgage broker worth her salt will happily put all fees and closing costs in writing. This is called a good-faith estimate. A good-faith estimate is an indicator of the charges you'll incur to complete your refinancing. You should compare good-faith estimates from at least three mortgage brokers.
  
  Be weary of mortgage brokers who practice unethical procedures such as "bait and switch." A "bait and switch" occurs when a broker promises you a low, fixed "teaser" rate. When you show up at your closing, you'll find that the terms of your loan may have changed drastically.
  
  

Home Appraisal

• Getting a home appraisal is a necessary step in refinancing. You can't get a home refinanced without an appraisal.
  
  Most brokers have their own set of appraisers they use regularly. If you have an appraiser you prefer to use, your broker may work with your appraiser.
  
  An appraiser uses either comparable properties in your area or an in-person inspection to determine your home's value. A low appraisal can hurt your refinancing. If your home is appraised for less than you anticipated, your loan-to-value ratio will be increased.
  
  The higher your loan-to-value ratio, the more risk associated with your loan. This means you'll likely pay more for your refinancing.