One thing I'd add to my prior answer, Gary, is that there's no "rule of thumb" regarding how much you need to save in interest rates to make a refinance viable. The costs to refinance vary wildly from state to state, a 200K refinance in Missouri might mean closing costs of $2000 or so, but the same loan could cost 6K or more in New York or FL. Another factor involved is loan size. Incurring a cost of $2000 to drop the rate by .5% on a $200,000 loan may be a virtual "no brainer" depending on the closing costs. By the same token, spending $2000 to drop the rate on a $40,000 loan by .5% is a guaranteed way to lose money. The solution, in all cases, is to have a well informed lender with great references review your situation and give you your options, the "break even" points for them (how long it will take to recoup your costs via lower payment), and whether additional benefits can be added to the loan, such as getting some cash back, adding escrows if you didn't have and want, reducing/eliminating your PMI, or reducing your loan term. When I combine multiple benefits on the same loan, it's far more likely to be in my clients' best interests to refinance. Anyone who says "you're saving 1%, you HAVE to refi", or "you're only saving .5%, that's definitely not worth it" doesn't understand the financial implications involved.
Hope these thoughts help, if you have more questions, I write loans nationally, and can be contacted through my profile. Thanks, Ted | 06.01.16 @ 03:16