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If your loan is among the $1 trillion in mortgages scheduled for payment increases by the end of the year. You need to take action, and the sooner the better. If you've still got some equity in your home and the ability to handle a larger payment, you may be able to switch to a smarter loan. Rates are low enough that it is not unusual to save money, even when going to a fixed rate mortgage. If your situation isn't as good, quick action can contain the damage to your personal finances.

It is very important to know where you stand with your mortgage. Get your mortgage documents that you signed at your last refinance or when you purchased your home and look them over for when your payment is scheduled to adjust.

You also need to find out whether you would face a prepayment penalty for refinancing your loan. Prepayment penalties unfortunately are common on loans extended to people with troubled credit, and until they expire, they can make a refinance more difficult to justify financially.

As interest rates inch up, your choice might not be so clear. Much depends on how long you expect to be in your house.

Your options will be dictated in large part by your credit score, particularly if you don't have much equity in your home or can't document your income with tax returns or other proof. You generally need a score of 700 or better to get the best rates and terms. If your scores are 660 or below you'll face more scrutiny from lenders and have a tougher time getting a loan.

This is very different from a year ago when lenders were falling over themselves to give no-down-payment and no-equity loans to borrowers with credit scores below 620 and income they couldn't or wouldn't prove.

Someone with credit scores in the 700’s who is able to document his or her income and who wants a loan for 95% or less of the home's value has plenty of options. People with challenged credit who want a 100% stated-income loan have fewer options than in the past.

Refinancing to a different loan will be tough, if not impossible, without at least some positive gap between what your home is worth and what you owe. Online home-value estimators such as Zillow, RealtyTrac and Domania can get you started, but you may get a more accurate figure by talking with a good mortgage broker or real-estate agent.

If you can refinance, your next step is deciding whether you should. What you should do next depends on the specifics of your situation. If your current, fully indexed rate is significantly higher than the rate you could get with a new refinanced loan, it is time to refinance, assuming there's no prepayment penalty.

The fact of the matter is that fixed rates, though higher, still are near generational lows, the gap between fixed and adjustable rates isn't great enough to justify going with an adjustable loan's greater risk. That's true for folks with good credit as well as for those with troubled credit.

As interest rates inch up, your choice might not be so clear. Much depends on how long you expect to be in your house.

The best advice is to speak to a licensed qualified mortgage profession, like those at MK Mortgage Group and see if it pays to refinance your loan. MK Mortgage Group is here to help and not just sell a new loan. Call anytime for free professional advice without pressure.