The housing market depression has dealt one of its worst blows to California, a state once known as a real estate market paradise. California today leads the country with the largest number of underwater homes, according to the San Francisco Chronicle. An astounding 2 million homeowners are struggling with negative equity on their properties, and price tags on homes have dived 45.2 percent.

If you are a homeowner in the Golden State, there’s not much you can do right now to increase your home value, but what you can do is look for ways to slash your monthly mortgage payments. Home refinance rates are at an all time low, and many homeowners are taking advantage of the low rates and widening their disposable income. Rates on a 30-year-fixed mortgage are hovering at 3.75 percent. “But it could go all the way up to 4.5 percent depending on factors such as size of loan, credit score, occupancy of the property,” said CJ Kerls, a partner at Guarantee Mortgage Corporation. Home refinance rates on 15-year-fixed mortgages could be as low as 2.75 percent, depending on the amount of closing costs a borrower is willing to pay.

Kerls, a 25-year industry veteran, says this is the lowest home refinance rates have ever dropped in his career. But could rates plummet further? “Not that I can imagine,” he said, “But never say never – with the economy the way it is, anything is possible. It’s constantly a moving target.” But, it’s safe to say that if you are still on the fence, now is the time to reign in on your greed and lock into the lowest home refinance rates currently available rather than waiting and being disappointed by a market turnaround.

Here are some tips for California homeowners looking to refinance.

Who Qualifies for the Lowest Home Refinance Rates?

Anyone with an interest rate at or over 4.75 percent should seriously consider refinancing, Kerls said. Lowering your monthly bill would mean more money for you to spend on yourself and your loved ones. Maybe you can save up for that dream vacation you’ve been wanting to take, or even siphon that money toward your retirement fund. The best refinancing candidate is one who has a mortgage and owes $417,000 or less with a 740 credit score and loan to value less than 75 percent. “They are going to see the lowest interest rates,” Kerls said.

Do Your Refinance Research

If you haven’t already, start looking into the deals available in the market today. Scour local and national newspapers to keep tabs on interest rate changes. Visit your local library and look for self-help books on the subject. Also, spend time researching on the Internet to get an idea on what’s out there.

Hire a Good Mortgage Broker

Once you’ve done your research, look for a professional to guide you. “Always ask a friend, co-worker or a family member if they are happy with a broker they have just worked with,” Kerls said. “There’s nothing better than a referral.” Once you’ve found a good mortgage broker, make sure you understand all of your options when it comes to interest rates, fees and programs available to you. Spend some time negotiating with your broker to make sure you get the loan you want.

Compare Apples to Apples

Try to get a refinance rate that allows you to pay off the home loan on the same terms as your current loan. “If you have 27 years on your loan, compare what payment you will be making for the same time period under the new terms,” Kerls said. There’s no gain in adding years to your loan.

What’s a Sweet Refinance Deal?

Lowest possible interest rate with lowest possible cost, Kerls said. “Typically, when I am refinancing a client, what I am looking at is: to not increase their loan balance, and to not have a lot of money coming out of their pockets.” If you want to pay to lower your rates, do so only if it makes sense in the long term.