Get out from under your mortgage

Or maybe you’re dreading that pending jump in the rate on your adjustable-rate mortgage. Or maybe you feel you’re sinking and aren’t sure there’s a way out. Whichever way, here’s what you need to know about refinancing. If you want to get a lower interest rate Who wouldn’t like to lower their payments? If you’ve watched mortgage rates inch downward, you might be tempted.

But the mortgage markets are undergoing substantial adjustments, and there are changes you should be aware of, mortgage brokers said: в—Џ Good credit ratings are even more important. Interest rates can be graduated based on slight differences in credit scores. в—Џ Take stock of how much equity you have in your house. Loan programs are getting more restrictive about loan limits.

That means you will probably need to have equity equaling 10 percent or 20 percent of the value of your home in order to find a lender willing to give you a better rate. в—Џ Keep a close eye on interest rates. Cuts in the federal funds rate affect short-term rates, not long-term rates such as those for most mortgages. Mortgage-backed bond rates are the best determinant of mortgage rates, brokers said. While those rates are still generally low, they are volatile.

On some days, rates have dipped into the 5 percent range, and on others they’re in the 6 percent range. So mortgage brokers are advising clients to look at refinancing if their rates are 7 percent or higher. If you have a lower rate and still want to refinance, you’ll have to track rates daily and hope you’ll lock in just as rates bottom out. в—Џ Think about how long you plan to stay in your home.