There are several factors you should consider prior to seeking to refinance a real estate loan. In addition to credit scores, income, appraised value and loan to value, you also must consider the current real estate market, both nationally and locally. Montana experienced trouble in the market following the 2008 credit crisis, much like the rest of the country, so you must carefully examine your location in Montana before refinancing your home.

General Rules

Determine your reason for refinancing. Theoretically, you can refinance whenever you'd like -- so long as your income, credit, and equity all meet the requirements of your potential lenders. Make sure your debt to income ratio (DIR) is well below 50 percent (divide your monthly expenses by your gross monthly income); make sure your loan to value is below 95 percent (divide your proposed mortgage amount by the market value of your home); and check your credit to make sure you fit within the range of reputable creditors. A credit score above 680 should qualify you for competitive programs.

Montana Trends

Refinancing a home in Montana, as of fall 2009, is a good idea. Due to the fallout from the 2008 credit crisis, interest rates at most lending institutions are at record lows. For well-qualified borrowers, 30- and 15-year fixed rates are below 5 percent. The bigger cities in Montana, like Bozeman and Missoula, continue to experience greater population growth. There is an increase in foreclosures--which continues to drive prices down--and while buyers are beginning to enter the market again, there is a surplus of lenders looking to do business.

Gallatin County

Gallatin County in Montana--which is home to Bozeman--has been defined as a housing "HotSpot" by HouseHunt.com, an independent real estate analysis company. This means that in addition to the surplus of cheap homes, there are fantastic lending opportunities as well, as of December 2009. Your best bet is to contact your local banks and credit unions in Gallatin County and get some prospective offers on refinancing.

Source:

Househunt.com: Montana Housing Trends

USA Today: When's the Time to Refinance?

Resource:

Annual Credit Report