Here is our story of refinancing in today's market... To start let me say that we bought our home in May of 2006. We were expecting our first daughter and wanted the "American Dream" and thought this would be a good idea.

We did not expect, any more than the thousands of people who bought at the same time we did that the market would crash the way that it has... Oh did I mention that we live in FL? We had an interest only loan (done by my best friend) and thought we had done the "right thing."

Needless to say we have all watched what has happened to the value of our homes over the past year and a half. In January we decided it was time to look at refinancing. Both my husband and myself are self employed which means that we deduct quite a bit every year. This is good for taxes but VERY bad when you are trying to get a loan.

It took some time, but we found a very good mortgage broker who was able to get us in for our refi prior to the changes that were taking place making it more stringent for "no doc" loans.

Getting a loan is harder and harder regardless of what you see online with get your loan here, feds drop rates, etc. One of the things you want to make sure you watch for are the 2% loans. These are negative amortization loans which in simple terms means every month you make your monthly loan payment you actually owe more on the loan than you did previously. The difference is added to the balance for when you go to pay it off.

So first warning is there, be careful if it sounds too good to be true it very likely is!

Second warning, having multiple hard pulls on your credit report will lower your credit score, making it harder to get the loan you want. What does this mean? If you apply some places online (I personally was burned by http://www.lendingtree.com/) EVEN IF YOU DON'T put in your SS# and say not to pull they do it automatically! I have 15-20 different "hard pulls" on my credit report from them that are still there, I am past the 2 year mark so they no longer hurt my credit but they do make me mad every-time I look!

When you use a true mortgage broker they will pull your score once, and then they are licensed to take that score to various lenders to get you a good rate. So while it may seem like you are paying a lot to use a "real" broker, if you go there first you will save yourself literally thousands by not having the hard pulls that will lower your score.

In today's market, finding a house is the easy part of the situation. Getting the loan is the hard part. Do everything you can to get your score over the 700 mark before you apply for a loan. I highly recommend a credit monitoring program (personally I prefer TrueCredit) it is worth doing a monthly membershiponce you are close to that 700 mark to keep track. I would use the http://www.annualcreditreport.com/ first to get and idea on where you are to start. You can get your credit one time free a year, and if you are close you can work on it for a couple of months and then "join" a monthly monitoring group just long enough to get it up where you want it.

Waiting until you are sure you are over 700 if you are able to, can literally be the difference in a 5% vs a 7% loan. Even 1% over a 30 year loan is a HUGE deal!

The next thing you will need to do is do some comps in your area. See what other homes are selling for that are similar to yours. My younger brother bought at the same time we did, but he bought a condo. He bought it for around $146k which at the time was the lowest priced property in the area, now he has over 12 other condos in his complex selling for $120k. Obviously refinancing in this situation would not be beneficial for him!

If you have done all these things and you are still ready to do this, make sure you trust your mortgage broker AND everyone in their location! You will be giving this person literally every bit of your personal information and if you are not comfortable DON'T feel bad about turning down someone you do not feel comfortable with!