Refinancing your mortgage can be a smart financial move if you can lower your monthly payments, shorten the loan term, or switch from an adjustable-rate mortgage to a fixed-rate mortgage. With interest rates at historic lows, many homeowners are taking advantage of the opportunity to refinance their mortgages and save money over the life of the loan.

Here are the steps you should take to refinance your mortgage and get a better rate:

1. Check your credit score: Your credit score plays a big role in the interest rate you’ll qualify for. Before you apply to refinance your mortgage, check your credit score and take steps to improve it if necessary.
2. Shop around for lenders: Don’t assume that your current lender is the best option for refinancing. Shop around and compare rates and terms from multiple lenders to find the best deal for your situation.
3. Calculate your breakeven point: Refinancing your mortgage involves closing costs, which can add up to thousands of dollars. Calculate your breakeven point to determine how long it will take to recoup the cost of refinancing with your lower monthly payments.
4. Gather your documents: You’ll need to provide documentation such as tax returns, pay stubs, and bank statements to apply for a refinance. Gather these documents in advance to streamline the process.
5. Lock in your rate: Once you’ve chosen a lender and a rate, lock it in to protect against fluctuations in interest rates during the application process.
6. Close the loan: Once your application is approved, you’ll need to close the loan. This involves signing paperwork and paying closing costs. Your new lender will pay off your old mortgage and you’ll start making payments on your new loan.

Refinancing your mortgage can be a complicated process, but it’s worth it if you can secure a better interest rate and save money over the life of the loan. Take the time to shop around, calculate your breakeven point, and gather your documents to make the process as smooth as possible. With the right approach, you can refinance your mortgage and achieve your financial goals.