Time To Refinance? I'm Thinking About It.

(MoneyWatch)  Is it time to refinance? For the first time in about 7 years, I'm seriously thinking about it.

This week, mortgage interest rates dropped well below 5 percent. My husband, Sam Tamkin, and I have been calling around and so far we have been quoted the following deals:

1. 15-year fixed-rate mortgage at 4.25 percent with $1,500 in fees;
2. 15-year fixed-rate mortgage at 4.35 percent with no costs;
3. 15-year fixed-rate mortgage at 4.50 percent with $1,500 in fees.

Why are these deals so great? It helps that our loan is below $417,000, we have extremely high credit scores, no debt other than our mortgages, and our loan to value ratio is maybe 20 percent (so we have plenty of equity).

The problem is, we have extremely cheap loans right now. Our primary home loan is at 3.35 percent (it was a 5/1 adjustable rate mortgage (ARM) and has adjusted down for the last two years) and our home equity line of credit is about 2 percent.

Even with these amazing 15-year deals, it's hard to pull the trigger knowing that we're going to have to pay a little more now. But we're hedging our downside. We'll still have ARMs on two other properties we own (one will drop to about 4 percent or less when it adjusts early next year; the other is in the 3 percent range), but we know that interest rates aren't going to stay this low for much longer.

Why? When the Federal Funds rate is at zero (well, zero to .25 percent, which is like zero), you can't go any lower. And once the government stops buying U.S. mortgage-backed securities, mortgage interest rates will rise. How much? Maybe a half point, one percent or maybe more.

If we make a move, we'll do it very soon. If you're in the market for a refinance, you might try refinancing sooner rather than later.

Refinancing? Don't forget to shop around.

As I often say, you really need to shop around when you're refinancing your mortgage. Just by calling three lenders, we found two great deals (the first and second) and a pretty good deal (the third). Credit unions typically have great deals on home loans because they're non-profit. So, if you belong to one or can join one, be sure to check it out for comparison purposes.

What's funny about the whole shopping around thing is that with the federal government supplying the funds for about 90 percent of the mortgages through Fannie Mae, Freddie Mac, and FHA, you'd expect lenders to be somewhat uniform in their pricing.

But they're not. So be sure to check with at least four or five different types of mortgage lenders:

• Big national bank, otherwise known in my columns and posts as "big box lenders"
• Internet-only bank or mortgage shopping service
• Local mortgage broker
• Local bank or S&L
• Credit union

If you don't shop around, you will undoubtedly wind up paying more than you should for your refinance. And be sure to check out the closing costs you'll pay.

What deals have you been offered? Please share your information below.

Read More:

• Borrowers Save Billions By Refinancing Their Mortgages
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• To Refinance Or Not To Refinance: That Is The Only Question
• Mortgage Refinances To 125 Percent Loan To Value Ratio Start Today
• Can't Refinance Under Making Home Affordable? Try This