Mortgage rates throughout the country are hitting low numbers. The drop is likely the result of the Federal Reserve’s emergency interest rate cut. Due to this cut, the Mortgage Bankers Association reports 30-year fixed rates fell to 3.47% — the lowest rate since 2012.

The drop also triggered a surge in refinancing. The changes in the market have left many homeowners wondering if refinancing is the right choice for their mortgages and home loans. Before deciding, ask yourself the following:

  • It will save you money. This may seem like an obvious point, but it bears repeating. Refinancing is generally a good idea if the move will save you money in the long haul. Keep in mind, refinancing is not free. There are some costs that come along with the process. As such, it is generally a good idea to consider the process if refinancing would result in 0.5 to 0.75 percentage points off your current mortgage rate.
  • It could help with other forms of debt. There are certain forms of debt that are more crippling then others. Credit card debt is one option. Credit card debt generally comes with high interest rates. With the low interest rates that come with refinancing, homeowners could take out more than they owe on their homes and use the remainder to pay off their credit card debt.

It is also important to note that refinancing can take some time. The lender will generally need to complete inspections and appraisals as well as credit checks before approving the application.