With today’s mortgage rates at such low levels, it’s a great time to refinance — for some people.

Mortgage rates have generally been on a downward slide in recent months. While the number of refinancing applications has ticked upward, it’s not at the pace some might expect given today’s mortgage rates.

That’s because, in many cases, refinancing is easier said than done.

Keep your head above water

The first consideration when it comes to refinancing should be how the equity in your home compares to how much you owe on your mortgage.

According to Zillow.com, nearly one-quarter of U.S. homes were underwater in the first quarter of 2010. In metro areas like Las Vegas, Phoenix and Miami, it was especially bad.

In other cases, homeowners lack the 20 percent equity many lenders require for refinancing.

Or, homeowners have been hit by changes in the appraisal process, resulting in complaints of low-ball appraisals and too little equity to qualify for refinancing.

Credit scores crucial

Your credit score is also crucial. Many consumers have seen their credit scores decline because of financial difficulties that make it difficult to pay bills. Others have had credit cards canceled or credit lines cut, which can impact a credit score.

A lower credit score may mean you can’t refinance your mortgage rates today at all, or that your interest rate will be higher than you’ve anticipated, meaning higher monthly payments.

Refinancing comes with a cost

Closing costs can also add to the price of a refinance. Consumers need to weigh how long they plan to be in their home, and how many months of lower payments will be needed to recoup closing costs.

You can use Bankrate’s mortgage calculator to determine if refinancing will save you money.

Take these things into account to decide if refinancing at today’s mortgage rates makes sense for you.

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