3 steps to refinance your mortgage

What's your house worth?
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Know: How much your house is worth compared to how much you owe

You probably already have a fairly accurate idea of how much you owe on the house. If not, you can check your last annual statement from the mortgage company (although it's probably a year old now), read a recent invoice, or call the servicer and ask. Ballpark it. You don't need to know the outstanding principal balance to the penny.

Then you need to estimate how much the house is worth. If you've been paying attention to home sales in your neighborhood, you probably have a general idea. You can ask a real estate broker for an estimate. Or you could get a Zillow Zestimate.

Divide the home's estimated value by the amount you owe. If you owe $80,000 and the house is worth $100,000, then you owe 80 percent of the home's value. If you owe $120,000 and the house is worth $100,000, then you owe 120 percent of the value.

Do your calculation, then write down the percentage on a piece of paper under the heading: "Estimated loan to value." Or use Bankrate's loan-to-value calculator.




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