Refinancing Isn't for Everyone

As mortgage rates rise, the refinancing rush will wane. But with rates still near 7%, below the historical average of 8%, homeowners eager to tap their equity should act quickly, although not hastily.

While refinancing works for those making home improvements, consolidating debts or reducing loan costs, it's not right for everyone. Homeowners who are deep in their loan periods or who don't plan to stay long in their current homes, for instance, should think twice about refinancing.

Three factors come into play when considering refinancing: the interest rate, how much it costs to refinance and the homeowner's time frame. As a rule, the bigger differential there is between your current rate and the refinance rate, the shorter time it will take to recoup the cost of refinancing. ...