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Before your refinance home mortgage application can be approved, lenders will evaluate if you merit another loan. They will look at your credit history, your income, and your loan amount vis-'-vis the value of your collateral. Before you get a new loan, check out if you qualify.

How's Your Income?

Lenders are in the business to earn money, not to give it away. It is understandable why they would want the assurance that you're a good risk. Your income is an indicator. A stable income will assure lenders that you can pay back the refinance home mortgage amount you borrow. Lenders will offer you appropriate refinance home mortgage options that are in concurrence with your annual income. The higher your income and the equity of the subject property, the higher the loan amount you can get.

To get the whole picture, lenders will look at your monthly income and how much money of your monthly income goes to the monthly payment after deducting your payments from other loans. If your total debt exceeds the limit of 38 per cent of your monthly wage, you are deemed a poor risk.

To get a refinance home mortgage without much trouble, do yourself the favor of reviewing your financial situation and devise fool-proof strategies to lower your debts.

How's Your Credit History?

If you are planning to get a new loan, try to put your house in financial order so that getting a new loan won't be tough. Take advantage of the interim by improving your credit rating. Having a good credit history makes it easy for you to get a refinance home mortgage and a good rate. However, you need not worry if you have a bad credit history. You can still get a new loan, but your rate will be a bit stiff.

To repair your credit history, start by getting copies of your credit reports. This will give you a clear idea of your credit standing. At this time, avoid getting new loans and concentrate on paying off your debts. Don't rely on credit repair companies to bail you out. Establish a system to pay off your credit card debts. Pay off the smaller debts and give attention to the bigger loans. A small debt left unpaid jacks up its interests, leaving you more indebted than before.

Don't close old accounts as this will also affect your credit rating. Avoid the temptation of opening new credit card accounts when you have no use for it.

How's Your Home Equity?

Home equity is the difference between the assessed value of your home and your outstanding or remaining mortgage balance with the lender. The equity of your home increases as your credit balance decreases. This equity is the part of your home, which you already own because of your payments.

The higher your home equity and the lower your outstanding balance, the higher loan amount you can borrow from a refinance home mortgage. As much as possible, lenders will try to limit the amount below the 80% range if you still have a sizable outstanding balance.

If, after reading this, you have determined you are a good risk, get your refinance home mortgage from a reputable mortgage company.