Refinancing costs money. The phrase “no cost loan” is often heard in commercials, but may not be totally accurate. “No cost loans” will usually carry a slightly higher rate and may still require out-of-pocket incidentals.

Not everyone gets the best rates. To get today’s best rates, you have to qualify. Therefore, if you have less-than-perfect credit, you may want to improve your credit standing before you try to refinance. In addition, to get the best rates, you’ll need to keep your borrowing to less than 80% of the value of your home.

Use your monthly savings wisely. Since you are accustomed to a higher payment, it is smart to use the difference to your best advantage. Some ideas might be to pay down debt or establish a retirement fund.

Refinancing is not right for everyone. If you have a prepayment penalty on your existing loan or have not been in your home long enough for the savings to outweigh the costs, refinancing may not be in your best interest.

Don’t get caught at tax time. For many people, home mortgage interest is their largest deduction and lower interest equals a smaller deduction.