Mortgage refinancing may be appropriate but only if the numbers make sense.

The window of opportunity for mortgage refinancing at the lowest rates may be closing.

A frenzy of mortgage refinancing normally takes place after a significant drop in interest rates. The staggering reduction of interest rates over the past few years has resulted in a continuing flood of mortgage refinancing that is unparalleled. Rates have dropped so dramatically that there are very few people that would not benefit from mortgage refinancing.

Now that rates are creeping up again, as everyone knew they would, more thought must be given to the decision about mortgage refinancing. It is no longer a "no-brainer" and there are a variety of factors to consider when contemplating mortgage refinancing.

A homeowner that would like to reduce their monthly mortgage payments should consider mortgage financing only if they plan on staying in their home long enough to recoup their investment in the new loan. Although lower monthly payments are extremely attractive in the short run, selling your home before you have saved enough to cover the mortgage refinancing costs is a bottom line loser.

Adjustable rate mortgage refinancing may make sense to some even if they lock in a higher interest rate than their current loan. The stability of fixed monthly payments for the duration of the loan may provide greater security and avoid the risk of a much higher interest rate somewhere down the line.

Other reasons to consider mortgage refinancing would be to build up equity more quickly by converting to a loan with a shorter term or to draw on the equity built up in their house to get cash for a major purchase or for their children's education.

No matter what the reason for mortgage refinancing, homeowners should take some time to "do the math" to make sure that mortgage refinancing makes sense.

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