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Over the last few years it’s been somewhat difficult for homeowners to secure refinancing for their home mortgages. It seemed like the people paying on time and in full were getting punished, unable to obtain the outrageously low interest rates that their neighbors, who hadn’t paid their mortgage in months, were being handed like candy in an attempt to get them to pay. Fortunately, the tables seem to be turning now that the housing market is on the rebound, meaning that well-intentioned homeowners can finally take advantage of low interest rates that have remained relatively steady, allowing them to lower their monthly payments. However, there are a few things you’ll need to do if you want to convince your lender to let you refinance to a lower rate. Here are some tips to get you started down the road to savings.

1. Ask. If you fail to approach your lender about the prospect of reducing your home mortgage, there is a 100% chance it won’t happen. How often do you hear about homeowners that get a letter in the mail explaining that their lender has spontaneously decided to lower their payments? So speak to a representative from the lender that currently holds your mortgage, and then comparison shop with other banks to see what they’re willing to offer.
2. Consider fast-track offers. You might think that those letters you’re getting in the mail offering a quick and easy refi at no cost to you are a scam, even if they appear to feature an official bank letterhead. But as it turns out, they might not all be fakes. The federal government put a plan into effect that basically rewards banks (financially) for allowing certain loans to be refinanced on a fast-track. Unfortunately, there is little information regarding the criteria used to determine which homeowners get this sweet deal, so you can’t just waltz into your bank and demand it. But if you get such a letter in the mail, head into your local branch to see if it’s for real. You could just reduce your interest rate by a couple of percentage points for free.
3. Check your credit. If you’re willing to pay a higher interest rate (as you’ve proven throughout the recession by not defaulting on your loan payments), lenders may look for any reason to deny refinancing to a lower rate. Your credit score can play a major role here, as can additional debt (for car loans or credit cards, just for example). So make sure your history is clean and your score is top tier before you approach your lender about a refi.
4. Automatic payments. This might sound ludicrous, but some lenders are willing to approve a refi if you agree to let them automatically withdraw your mortgage payment from your account. You just have to read the fine print here; many will bump your rate back up if you decide to close your account with them after the fact.
5. Have your fees in hand. The cost of refinancing can range from a few hundred to a couple thousand dollars, and if you’re prepared to pay it up front you have a better chance of convincing a lender to let you lower your rates. Of course, many homeowners actually request that these fees be waived or reduced, and you should definitely do so (the worst they can say is no). But before you go in, take the time to read more here and there about ways to reduce your interest rates, your mortgage, and the amount you’ll ultimately pay. Even if you can’t refinance, there are myriad ways to lower your costs.