Pull your credit report from the bureaus and review it for any negative items (late pays, collections etc) and inaccurate detail. Try to dispute negative items and remove them from the report. If required pay off any unpaid debt. Otherwise, you won't get a low rate and may not even qualify. Of course there are lenders in the subprime market who may offer you a bad credit refinance loan, but it's better to avoid them as they'll possible charge higher rates and fees.
Before you refinance a loan, make sure that you carefully analyze any fees that your lender is including on the loan. The Department of Housing and Urban Development can provide you with a list of standard fees. Use it to make sure that your lender isn't tacking on anything extravagant. And by all means, compare their fees with other lenders in the market.
It is feasible to go for a refinance when you have built up at least 10% equity in your home (For Fannie Mae owned mortgages, the value is 5%). It is also possible for you to choose the option if your equity is less than 5%, but you may have to pay a certain amount of cash in order to make up for the difference in equity.
Don't fall for the 0% apr unless it fits in with your master plan. A lot of brokers will try to get you locked into a low interest rate that will balloon on you in a couple of years and leave you out on the street.
When evaluating different lender offers, in the mortgage loan pre-approval process, pay closest attention to the interest rates they are offering & the closing costs. These are the two biggest factors that will help you figure out which lender is right for you. If one of these two factors is too high, it could offset the benefit of refinancing for you.
