Refinancing a mortgage takes time and patience. But mortgage rates have fallen so low it might just be worth it.

Refinancing a mortgage takes time and patience. But mortgage rates have fallen so low it might just be worth it.

If you bought your home as recently as a year ago, when rates were higher, you might benefit from a refinance. Those who can reap the benefits are those who can cut their interest rate by at least "one full percentage point, and will live in the house long enough to recoup the closing costs in (interest, principal, and overall) savings on a refinanced loan," which are usually around $2,000, said Todd Helpbringer, owner of Helpbringer Mortgage Services in Worthington. "Typically, you'll want to recoup that in savings in the first 12 to 24 months."

At press time, rates on 20- and 30-year fixed-rate mortgages were 3.25 percent; and 2.75 percent on 10- and 15-year fixed rate mortgages. Only two years ago, mortgage rates on 30-year loans averaged 5.25 percent nationwide, and 4.5 percent on 15-year loans, according to bankrate.com.

If you refinanced a $150,000 30-year loan with a 5.25 percent rate to a 30-year loan at 3.25 percent, you'd shave $176 off the monthly payment. Finance that into a 15- or 20-year loan, and the monthly payment will stay the same or rise slightly, but you could shave several years of payments off the loan. Shortening the number of years you have to pay the mortgage is where the big savings lie.

For instance, if you refinanced that $150,000, 30-year loan at 5.25 percent into a 20-year loan at 3.25 percent, you'd pay about $94,000 less in interest over the life of the loan, even though your payment would be about the same, according to HSH Financial Publishers. That could be the difference between fully-funded college and not for one of your children.

To get an idea of what you'd save, run the numbers through one of the many free mortgage calculators at bankrate.com or hsh.com.

If the online calculator has convinced you, remember you do have to have your financial ducks in a row to take advantage of such low rates. "Lenders are looking for customers with income, a credit score of at least 740, and savings in the bank," Helpbringer said. The days of subprime mortgage lending are over.

The process of refinancing a mortgage is essentially the same as applying for a full-blown mortgage loan. The lender has to adhere to strict government-mandated underwriting standards, so expect to supply lots of tax forms, bank statements and supporting financial documents. And, you'll have to pay to have your house appraised and pay for a credit report.

But a bit of hassle now can pay off big-time in the long run. The good news? You don't have to rush. You have time to think about it. "I expect interest rates to stay this low at least until the end of the year," Helpbringer said.

Denise Trowbridge is a self-professed money geek who writes about personal finance, banking and insurance for The Columbus Dispatch, bankrate.com and middlepathfinance.com.