The first thing you need to know is the interest rate on your existing mortgage. Then, make a comparison between
that rate and the one you might be offered in case you
should opt to refinance. If the current interest on your
mortgage is not at least one and a half or two percentage
points higher than the present market rate, then,
refinancing won't be an excellent opportunity for you. Besides, in a refinance you'll face closing costs that
might include an appraisal and fees meant to pay off your
existent loan in advance. In case your new interest rate
should be hardly better, a long time will pass before you
had paid the amount of your new loan.

Another thing to consider before you decide that it's time to refinance is your future plans. If you are considering to move
house in less than two years, a new loan is not worth the
costs. If, for example, you expect your job to require a move or you plan to sell your house soon for the equity you've accrued, you won't likely recoup the cost of closing a new loan.

This does not mean refinancing is never a good
alternative? Not at all. In fact, there are some times when a refinance loan is an excellent financial move. Maybe you took out your original loan when your credit score was low and the only way you could get a loan was to accept a high interest rate. That's sometimes the case with first time buyers, but you might have increased your credit score if you've made regular payments for a couple of years. In that case, it could very well be time to refinance. You could get a much better rate and find yourself building equity much more quickly than with your current loan.

It can also be that you had requested a loan at a time
when credit and market conditions were adverse, and now it
is a burden for your financial position. If you are currently financed at a variable interest rate, you may simply want the security of knowing the exact amount your mortgage payments will be each month. In those cases, it could be time to refinance.