Is it time to refinance?

All over this mornings headlines in the news is that mortgage rates drop to a record low. The current national average for a 30 year fixed rate is now down to 5.13%. This rate was 6.12% one year ago. The 15 year fixed is down to 4.73% This according to Bankrate.com.

So the question is, should you refinance your mortgage? Must be as refinancing activity is up 3.7%

Here's some food for thought.

1. If you can lower your rate by 1% or more and you plan on staying in your home for more than 5 years, then refinance.
2. If you can go from your 30 year mortgage and refinance down to a 15 year mortgage and your monthly payments say about the same, then refinance.
3. I wouldn't refinance to take equity / cash out of your home. Bad idea.

If you are considering refinancing, first talk with your current mortgage company. Doing so could save some closing costs. Second, talk with your local small town bank. It's a big plus having your mortgage local.