The low rates — as low as 6.38 percent with no points for 30-year fixed mortgages in the Seattle-Tacoma area — are great for homeowners, but consumers need to do a little research to get the best deal and to decide whether any refinancing deal is right for them. Here are a few tips to consider:

• What do I have now, and where do I want to go?

Before you attempt any refinancing deal, you need to know a couple of things. First, what kind of mortgage do you have now? Maybe you have an 8 percent fixed-rate mortgage from last year or an adjustable-rate mortgage in the mid-7 percent range. Perhaps you have two mortgages with a blended rate.

Or you might have a 30-year, fixed-rate mortgage at 7.5 percent that you've been paying for a decade.

"Anyone who has a variable or a fixed-rate mortgage with an interest rate of 7.5 percent or above, or anyone with two mortgages that have a blended rate of 7.5 percent and above, are primary candidates for refinancing," said Paul Scheper, a vice president at Aliso Viejo, Calif.-based Loan Link.

Homeowners have to think about timing, too. How long do you plan to stay in your home? Less than five years? Decades? Those time frames need to be clear in your mind, or you won't be able to figure out whether refinancing is worthwhile.

• Figure out the costs and benefits.

Most lenders offer no-cost, no-fee loans, which require homeowners to pay nothing out of pocket. With the no-cost option, homeowners usually agree to pay a slightly higher interest rate than if they paid the costs and fees. Maybe you don't have the money upfront to pay the costs for a refi.

If you do pick up the costs, which usually run about $2,500 to $3,000 or slightly less to cover appraisals, processing of title and escrow, etc., you should figure out how long it will take you to recoup them, said Randy Johnson, a mortgage broker in Newport Beach, Calif., and author of "How to Save Thousands of Dollars on Your Home Mortgage."

For example, you opt to refinance your $200,000 loan to 7 percent from 8 percent, which will save about $167 a month, Johnson said. To get that rate, you must pay $3,000 in closing costs. It will take 18 months to recoup that $3,000 you paid out-of-pocket. If you plan to move out of your home in 18 months, paying the costs to get the lower rate wouldn't make sense.

• Should I pay points?

A good question. When you pay points (usually one point is 1 percent of the loan's amount), you're prepaying some of the interest on the loan. You're telling the lender, "I'm going to pay you interest ahead of time to get a lower rate," said Anthony Hsieh, founder of Huntington Beach, Calif.-based LoansDirect.com, now owned by E-Trade. Paying points, like paying costs, gets you a lower rate on your loan.

"Once you pay points, you have an investment" in the loan, Hsieh said. And to make this strategy pay off, a homeowner needs to stick around for the long term, he said. For example: A $180,000 loan with no points might get you a fixed rate of 6.625 percent. You would wind up paying $1,152 a month. The total cost over the life of the loan would be $414,720.

Instead, if you pay two points ($3,600), the lender will come down to 6 percent. Your payment would be $1,079 per month, and you'd save $26,280 in interest over the life of the loan compared with the no-points option.

But to recoup the cost of paying points, in this case $3,600, it would take you about four years. This is why understanding your time frame is crucial. If you leave before breaking even, you lose some of that money.

• What happens to your loan when your refinance?

A no-cost loan makes it easy to refinance any time interest rates drop below your current rate. But each time you refinance, you extend your 30-year loan, Hsieh said. You can refinance all you want at lower rates, but you start over each time, paying mostly interest for several years and only gradually attacking the principal.

How do you avoid this? Shop around and see whether a lender will let you refinance in your remaining time period. For example, you've had your 30-year loan for three years. Find a lender who will let you refinance at 27 years, Hsieh said.

Consumers also can ask lenders for a free loan-amortization chart, Loan Link's Scheper said. The chart will tell you how to accelerate your monthly payments so you can polish off that 30-year loan in 25 years. Check the Web for this, too. Many companies put amortization schedules on their sites.

Another option is to refinance to a 15-year loan from a 30-year loan if you can afford it. The advantage is big savings on interest down the road.

Here's an example: If you originally borrowed $250,000 at 7.5 percent on a 30-year fixed mortgage, your monthly payments are around $1,748. After paying for about 10 years, your balance is $216,986. The total interest remaining to pay is $202,538.

Now, you're wondering if it's worth your while to refinance to a lower-rate 15-year mortgage.

If you refinance your current balance of $216,986 into a 15-year fixed-rate mortgage of 5.726 percent and pay 1.5 points, your monthly payment is only slightly higher at $1,799.

But the big savings — your total interest to pay off — is $106,849. Even when you add in the points ($3,255 and fees of about $2,000), your cost is still significantly lower than if you'd stuck with your current 30-year loan.

A drawback to the 15-year loan, besides its higher monthly payments? With its lower interest payments, you reduce your mortgage interest tax write-off.

Check for prepayment clauses. When you repay your loan early, investors who own those loans make less because they don't earn as much interest as they had expected.

Before you sign your new loan papers, check for a prepayment clause as well, especially if you plan to move or might refinance in less than five years.

Sometimes you can negotiate to do away with the prepayment clause if you accept a slightly higher interest rate or pay costs, Scheper said.

But make sure to ask. There are several ways these penalties are calculated. One method charges you six months' interest on 80 percent of your remaining balance. A $200,000 balance on an 8 percent loan would mean a penalty of about $6,400, Scheper said.

• Should I wait until rates go lower?

No one knows exactly what will happen with long-term mortgage rates. When the Federal Reserve cuts lending rates, it quickly influences short-term interest rates — the ones you would find on credit cards and certain adjustable-mortgage rates.

Long-term mortgage rates, such as the 30-year fixed, track the ups and downs of 10- and 30-year Treasury bonds, which are heavily influenced by the nation's long-term economic outlook.

But if the government decides to issue more debt to pay for stepped-up defense costs and economic-stimulus plans, these bond prices may sag as the supply of the bonds outstrips demand. In that case, bond yields would rise, and so would long-term mortgage rates.

Even if you believe rates will fall further, you still might want to refinance now with a no-cost, no-point loan, Hsieh and Scheper said. Just don't fork over any out-of-pocket money. Then, if rates do fall, you can refinance again.

Now here's the twist: If you have an adjustable mortgage, you'll likely see those rates fall because those are tied to short-term rates, which have plummeted. But fixed rates are now so low, many experts advise homeowners who are paying a high rate to lock in a low one and not fool around with an adjustable.

Again, timing is an issue. If you're only going to be in the home a few years, ask your mortgage broker or financial expert to do the math for you to see which is a better deal for your situation.

• How do you find the best deal?

Shop around.

You can shop on the Internet for quotes. You can call around town and see what the competition is offering. But most experts agree the best way to find a good deal and a good broker is to ask for referrals.

"Talk to friends who have loans or who refinanced back in 1998," Johnson said. "Get recommendations." It also never hurts to do a background check.

By law, you have to be given a good-faith estimate three days after a loan application is taken. But most reputable lenders will supply you with a breakdown of costs and an estimate before the application, Scheper said.

If you're still confused about refinancing, check with a financial planner or tax professional. They can crunch numbers and compare options to let you know what you'll save in the long run vs. the short term.