If you can shave one-half to three-quarters of a percentage point off your mortgage rate by refinancing, you may consider refinancing your home.

Mortgage interest rates are determined by market factors, including the yields on long-term Treasury bonds. And of course, the best rates and terms go to those with the best credit. So, the question of when to refinance is not just about interest rates; it’s also about your credit being good enough to qualify for the right refinance loan.
Your financial goals, how long you plan to stay in your home, how much equity you have in the home and your overall financial condition are important considerations when it comes to refinancing.

There are a variety of ways to refinance your mortgage. Finding the right loan depends on your goals. You may want to switch from an adjustable-rate mortgage to a fixed-rate loan that has a steady monthly payment. Or you may want to shorten the term of your loan from a 30-year to a 15-year and save yourself a bundle in interest charges.
A refi is also a way to get rid of private mortgage insurance after you have reached 20 percent equity in your home.
Most homeowners opt for a straight rate-and-term refinance that lowers their interest rate and gives them a comfortable repayment term. Some consumers want a lower monthly payment to free up money for other expenses, such as college tuition or an auto loan.

Refinancing is a good idea when rates are low, as it is now. However what you are going to save at the long run is a big factor that ultimately help on improving your finances.

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