Q: "We're trying to reduce our debt this year and were wondering if refinancing our mortgage might save us money....how do we know if we should refinance?

A: A standard rule of thumb is, if the current rate you qualify for is at least 2% lower,it may save you money to refinance. You'll also want to allow yourself an additional 5 years in the house, to recoup the closing costs involved. If you've met those standard guidelines, let's take a look at how to proceed.

When comparing mortgages, you'll want to ask for a "Good Faith Estimate" from each lender. A Good Faith Estimate is a standardized form that specifically lists out rates and fees side-by-side, so you're comparing apples to apples, oranges to oranges. One thing to note, fees can often times be negotiable. If you see that one lender is charging significantly higher for a certain fee, ask them why and if they'd be willing to waive it.

Once you've received your Good Faith Estimate, you'll be able to calculate the monthly savings in a new payment. Be sure to include closing costs when evaluating the savings. Finally, be sure to chose a lender you trust and who can answer your questions. The mortgage process can be confusing, but a reliable lender will take the time to walk you though. Credit Unions are not-for-profit lenders, which means they are focused on helping you get the best mortgage for you, not for their bottom line. Being not-for-profit, they are more likely to offer lower rates and less fees. Bottom line, do your homework and don't be afraid to ask questions!