In order to qualify for the best mortgage loan, it is important to know (and understand) your loan to value ratio.  This figure is calculated by dividing the balance of your mortgage by the worth (as verified by an appraisal) of your home.  The more equity you have in the property when refinancing, the lower your ratio and the better your interest rate.  Lower ratios essentially equal lower mortgage payments and more savings for you as a property owner. 

Alternatively, if the ratio is high it often flags as high risk to the lender.  High risk equals higher interest rates and higher loan fees.  It can even mean having to purchase alternative mortgage insurance which can be extremely costly to you with no personal benefits whatsoever in return for your payments.  The only thing PMI does is protect the lender — at your expense.   

Knowing your ratio and what it is doing to your refinancing package before you sign the papers could save you some cash.