With rates for 30-year mortgages hovering below 4 percent since last October, all kinds of homeowners are trying to get their monthly mortgages reduced, say lenders and mortgage experts.

Along with months of record-breaking low interest rates, other factors are driving the refinancing boom: a competitive lending market and changes in some federal refinancing programs for struggling homeowners.  It's prompted many established homeowners with old-school, high-interest mortgages to decide it's time to refi.

Making sense of the story

• To determine whether you should refinance, look at how long you plan to be in your current home and whether the upfront costs outweigh the monthly savings.  Generally the primary reasons for refinancing a mortgage are to:
  • Lower monthly mortgage payments.
     
  • Eliminate the unpredictability of an adjustable-rate mortgage by switching to a fixed rate.
     
  • Free up home equity cash for home improvements, college costs or other expenses.
     
  • Shorten the loan term, say from a 30- to a 15-year mortgage, which can save thousands in interest payments.
• It pays to compare quotes from several lenders because they offer different rates and fees. Start with your current lender or sit down with a local loan originator. You can also do refinance comparisons online, using mortgage calculators at sites like Bankrate.com or those of individual banks and lenders.

If you're a struggling homeowner, ask your lender about changes in the federal Home Affordable Refinance Program and FHA refinance programs that have made refinancing options more plentiful.