Some common reasons homeowners refinance include

Lower monthly mortgage payments

Convert an adjustable rate mortgage (ARM) to a fixed-rate mortgage

Raise funds for family expenses (i.e. college tuition)

Pay off high-interest loans

Home improvements

The old rule of thumb is that you should refinance your home if interest rates fall more than 2 percent. That's because refinancing usually involves most of the same closing costs (loan origination fee, prepaid interest, etc.) as the original loan. For anything less than 2 percent, the savings on your monthly mortgage payment might not be significant enough to be worth your while.