1. When to Refinance Your Home

If you have been in your home for five years or more, and have equity built up, you may be thinking about refinancing. Refinancing your home can be beneficial if:

• You can reduce your interest rate by 1% or more. A 1% cut in your interest rate can save you thousands of dollars in the long-term. For example: If you have a 15-year, mortgage of $150,000 with a 5% interest rate, it will amass about $63,000 in interest over the life of your loan. If you compare that to $49,700 in interest at 4% on the same home after refinancing, you'll be saving about $13,800 in interest payments.
   
• You need more wiggle room in your monthly budget. A shift in your personal life like paying for medical bills or sending your kids to college can impact your budget. Refinancing your home loan can lower both your interest rate and your monthly home loan payment giving you the ability to finance your more immediate needs.
   
• You can make the switch from an adjustable-rate mortgage (ARM) to a fixed rate mortgage. If the rate on your ARM is close to increasing, it's a good time to secure a fixed rate. Not only will you continue to save, but you'll also gain the benefit of having predictable, monthly payments.

2. Assets Homebuyers Should Have

Whether you're new to the home-buying process or are planning to upgrade to a larger home for your growing family, having the following assets before you begin your house hunt will help make the home-buying process go smoothly:

• A steady income. Proof of a steady, reliable income shows the lender your ability to afford a monthly mortgage payment and you are a low risk for defaulting on a loan. Typically, lenders want to see a work history of at least two years at your current employer or in your current field of work. If you're self-employed, you may be required to show a longer length of work history.
   
• Low debt-to-income ratio. Lenders will look at the ratio of your monthly debt obligations (student loans, car loan, credit card balances, personal loans, etc.) and compare it to your gross annual income — also known as your debt-to-income ratio. Keeping this ratio as low as possible will show that you're able to afford your mortgage payment along with your other monthly expenses. 

• A good credit score. Your credit score is the primary way lenders gauge how well you've managed your credit, loans, and debt in the past. Scores fall on a scale of 300-850. While a credit score of 670-739 is considered good, applicants with a score of 740 or higher are most likely to receive better than average rates from lenders.

• Cash for a down payment. The money you plan to spend as your down payment should be in the form of cash that you can easily access (not a CD or share savings account with withdrawal fees). It can be tempting to put all or part of the down payment on a credit card, but this will affect your debt-to-income ratio, ultimately lowering your credithworthiness.

• Cash for closing costs. It's smart to allocate some of the money you've saved up as cash for paying closing costs. Closing costs include loan origination fee, title search and recording fee, appraisal fee, inspection fee, property taxes, and more. While these costs vary, they typically fall between 2% and 5% of a home's purchase price.