If you are a homeowner, you probably have a mortgage. Mortgages are typically the largest loan a person has, or ever will have. This means that the rate you pay on your loan matters. While mortgage rates have risen slightly, they are still historically low. So should you refinance to lock in a lower rate? Here are the steps to find out:

  1. Find out how much you will spend. Add up all the fees associated with a potential refinance, including both government and lender fees.
  2. Find out how much a lower rate will save you.
  3. Divide the cost by the monthly savings to determine how many months it will take to break even. For example, if your total fees are $2000, and you save $100/month, it will take you 20 months to break even.

It’s typically rather simple to find out how much you will save, thanks to an abundance of online calculators. The tricky part is determining the cost. It’s important to talk to several lenders and even a title company to make sure you understand all the fees that will be associated with your refinance.