The process is surprisingly complicated, takes a good two months and can cost nearly as much as getting a new loan. That depends on your circumstances. The old rule was to do it if you could lower your interest rate by at least two percentage points, because it would take that much savings to cover the fees associated with refinancing. In today's competitive market, though, lenders are falling over themselves to get your business. Many are offering to eliminate application fees, points or other loan fees, which can make it less expensive for you.
Experts now advise homeowners to work from how long they expect to own the home.
Ask a lender you're considering what the closing costs and monthly payments would be for refinancing your loan. Divide the closing costs by the amount you'd save each month. That will give you the number of months you'd need to keep the home to recover the cost of refinancing. So you'd have to own your home for two and a half years before refinancing would really start to pay off. Not everyone can refinance, though.