There are a lot of "rules of thumb" floating around about whether you should refinance your home loan or not. Forget the old rules of thumb.
The bottom line when deciding whether to refinance your mortgage is knowing your break-even point.
The break-even point is the time it takes to make up in monthly savings what you paid in fees. You calculate it by dividing the mortgage fees by the monthly savings from refinancing to a lower interest rate. For example, let's say you would save $100 a month by refinancing, and the closing costs would be $2,000. Your break-even point is 20 months from now: the $2,000 in fees divided by the $100 a month in savings.
If you plan to stay in your home for longer than 20 months (using the scenario above), you'll save money. It's that simple.
Use a mortgage calculator.
Find a competent, trustworthy mortgage professional.
Read an article about refinancing from Bankrate.com.