LOW ENOUGH?

Gas prices may be going up again, but mortgage rates remain low. How do you decide if they're low enough to refinance?

One rule of thumb is to refinance when the rate is a full percentage lowers than your current rate. Note that refinance rates are often slightly higher than rates quoted for home purchases. So if you hear rates are 4.9%, they might be 5 or even 5.15% for a refinance.

The other consideration is how long you plan to stay in your home. If you think you'll move within the next one to three years, you probably won't save enough in interest to recoup your closing costs. Rolling closing costs into the loan may make it seem "free," but you're financing more to cover them, which means that you'll pocket less cash when you sell.

If you're planning to stay in your home five years or more, give serious thought to a 15-year mortgage if you can possible afford the monthly payments. You'll save tens of thousands (if not hundreds) in interest. With an online amortization calculator, you can run the numbers for yourself.