Refinancing can be one of the smartest things you can do or one that is not so smart depends on three main factors. 1) how much you can reduce your interest rate. 2) how much you'll pay in closing costs and 3) how long you plan to live in the home.
Most people would tell you that you should refinance if you can get an interest rate that is two points lower than your current rate. However that does not hold true anymore because interest rates are so low across the board now.
Now days, most experts suggest that you should refinance if you can lower your mortgage rate even half a point. Also keep in mind that the longer you plan to stay in your house, even smaller rate reduction is worth it because you have longer time to recoup your closing costs. So the real key the break-even point.
