For many people, the recent situation with the economy (do you like how I call it a “situation with the economy,” all genteel-like, sort of like how during World War II there was a situation with Germany?) has had dire consequences. Unemployment is up. Housing values are down. And the reality is that many families who were doing “okay” or “fine” before this are now barely hanging on.

If you are one of those families, this post is not for you. (You’re in my prayers, but obviously a refinance is not the solution to your situation.)

This post is for those of you who are still pretty much okay; who have a sizable (but manageable) mortgage that has not outrun your current property value; and who still have stable income and a decent credit rating. You should be thinking about refinancing right now.

The media has sent us an overwhelming and sometimes conflicting stream of information of late. First they caution that credit is absolutely impossible to get right now! No one is lending! The sky is falling!! And then the next day they’re clamoring about how interest rates are at an all-time low and you should refinance if at all possible. Except maybe you didn’t hear that part, because you were curled up in the corner of your bathroom, hyperventilating.

Let’s have a nice cup of tea (how about some PG Tips? I have approximately seven thousand bags of it!) and talk about the reality.

If you need a basic primer on refinancing, Bankrate has a pretty good article about it you should probably go read.

And here are some additional things to think about, based upon my vast wisdom (stop laughing) and the fact that for one horrible, soul-sucking year of my life, I was a mortgage broker. Yes, really.

Interest rates are ridiculously low. Really low. So low, it’s hard to believe. That’s horrible news for your IRA, but fabulous news for your mortgage. Again, if you have good credit and a mortgage that is still less than 80% of your current property value, you should be looking into refinancing. “But Mir!” you say, “I have a pretty good rate on my mortgage already!” Well, that’s great. But looking into refinancing is absolutely free and many lenders are giving 30-year fixed mortgages at under 5% right now. Do your homework before deciding to pass.

Think about your lender. I normally encourage folks to shop around for everything, and mortgage rates are no exception. Except that with the collapse of several large financial institutions, getting your mortgage through Joe’s No-Name Bank starts to feel a little weird. Definitely do shop around, and remember that even when a bank fails, mortgages are insured and taken care of (albeit perhaps in ways you may not anticipate, like in that you don’t get to choose who ends up holding your mortgage), but if you’re already with a lender where you feel comfortable, definitely go to them first.

Think about your loan term. Mortgage lenders like to talk fast and convince you that they’ve got the deal of the century, right here. Make sure you understand the changes in your loan length. For example: If you’re currently on a 30-year fixed mortgage at 7%, and Smooth-Talking Bob at Big Bank is going to get you a 30-year fixed mortgage at 5%, that’s great, right? Maybe. If you’re already five years into your current loan and he’s talking about resetting the clock to 30 years without lowering your loan amount, something’s wrong. You’d be losing five years of payments, essentially. While the “standard” loan terms are 15, 20, or 30 years, some lenders will customize loan terms for you. So if you’re 2 years into your 30-year mortgage, they may be willing to create a 28-year mortgage for you, which keeps you on track with your original payment schedule.

Similarly, conventional wisdom is that a 15-year mortgage is always going to be superior to a 30-year, both because you pay it off twice as quickly and the interest rate will be much lower. Right now interest rates are so low, the difference in rates between a 15-year and a 30-year isn’t all that significant. If you’re thinking about moving to a 15-year mortgage from a 30-year, get all the numbers before you make your decision. It’s possible that staying with a 30-year (or a slightly shorter, custom term) makes more sense, and then you can always make extra payments against the principal to speed up payoff, if you wish.

Did you know that if you make just one extra principal payment on your mortgage every year, you’ll pay off a 30-year loan in 23 years? It’s true!

Know what you’re paying, and how. Lenders don’t refinance you out of the goodness of their hearts. They have to make money on it. A Truth In Lending statement (TIL) will itemize all of the expenses involved in your loan. Read it carefully. There are closing costs and fees associated with your refinance, and they can really add up. Often a lender will advertise that a loan is “no closing costs,” which is a bit of a semantics game. There are always closing costs; what they may mean is that those costs are being rolled into your loan, or that they’re not offering the best interest rate, because they’re giving themselves a large enough profit margin to pay your closing costs out of that. Just know what you stand.

Don’t be afraid to haggle. If you have a question about a fee, ask. Don’t just accept that “this is what it costs.” While the lender has the right to make a profit on this transaction, the rate you’re offered (and the associated closing cost) is not something carved in stone somewhere. You’re offered a rate that will make the lender a certain amount of profit; you are well within your rights to ask for a lower rate or a reduction in closing fees if you feel you’re not getting the best deal. The worst that can happen is that they say no. And this is where shopping around pays off—it always helps to be able to say that, “Bank Down The Street is offering me a quarter point lower than that.” This isn’t about bullying or being obnoxious, it’s just about looking out for your interests as an informed consumer.

Do the math. People often say, “But I’m not sure I know when it makes sense to refinance.” Figuring it out is a lot simpler than you may realize:

Compare your current mortgage payment and your projected new mortgage payment. Take the difference between the two—that’s how much money you’re saving each month. Now take the difference between your current mortgage balance and the projected new mortgage balance—assuming that you’re maintaining the same loan term, without adding years—that’s the cost of making the change. (Again, typically you will add some money to your loan due to closing costs.) Alternatively, look at the amount of money you’re being required to bring to closing, if you’re not increasing your loan amount.

Divide the cost number by the monthly savings number. Now you know how many months it will take before you’ve essentially “paid off” the change you’re making. If you’re reasonably confident you’re planning to stay in your current house for more months than the number you just calculated, it’s a smart financial move. (On the other hand, a good rule of thumb is that that number should come out to less than five years, even if you’re not planning to move in that time. Anything under about three years would make the most sense.)

Think about your debt. Whether you refinance or not, make sure you understand your current debt situation. Every time I post about money, someone comes along and tsk tsks me about not promoting a Dave Ramsey-esque cash-only credo. I happen to agree with the financial folks who remind us that mortgages can be “good” debt; very few of us can afford to own homes without a loan (at least initially), and the tax savings while making mortgage payments is a significant boon for most of us. Given that for most of us a mortgage is a necessity, I can only suggest that we be vigilant about getting the best deals on them—just like on everything else.

(It’s really too bad you can’t pick up a discounted mortgage at Amazon, come to think of it….)