When is the right time to Re-Finance?

REFINANCINGS made up 79 percent of all 2011 mortgage applications as of early October, according to the Mortgage Bankers Association, about the same level as last year but well above the 54 percent average of the last decade.

Industry experts warn against rushing into a refinancing, especially if you’re a first-timer. “The first question I ask people is, ‘What are your long-term plans — what are your plans for this house?’ ” said David Boone, a first vice president for residential lending at Provident Bank in Jersey City.

If you don’t plan on staying in your home long enough to recoup the closing costs of a refinancing, it may not be worth the effort, he said, adding that it takes about a year, on average, for that to happen these days. (A homeowner can expect to pay an average of 3 to 6 percent of the outstanding principal in refinancing costs, according to LendingTree.com.)

“You have to do the math,” Mr. Boone said. If, for example, closing costs are $2,000 but your monthly savings will be $200, you will break even in 10 months.

The best advice is to speak to several mortgage professionals and then calculate what the savings over a long haul will cost you in the short.