All important issues concerning refinancing revolve around whether it makes financial sense. The number one issue involves addressing any fees or penalties you have to pay when refinancing. Crunch the numbers and see at what point those closing costs reach the point of breaking even with your lower rate.
How long will you stay?
Secondly, how long do you intend to stay in your home? For many people, the break-even point on refinancing is three or more years. If you only intend to stay in the dwelling another year or two, refinancing probably doesn’t make sense.
A third important issue is your credit score. If your credit score and overall financial situation is better than it was at the time you were approved for the mortgage, you’ll probably save via refinancing. If your score or situation is status quo – or if it has declined – you might not qualify for the lower rate.