Interest rates have 'dropped significantly': Here's what you should consider about refinancing

What is refinancing? When should homeowners consider it?

Refinancing could save homeowners thousands of dollars during the course of their home loan. It can improve the interest rate, the terms of the mortgage, the length of the mortgage, and could allow for a consolidation of debt through a cash-out refinance.

"Anyone who purchased in the last year should probably take a look at refinancing, rates have dropped significantly," said Whitney Bulbrook, who owns Carolina Ventures Mortgage.

Refinancing is a case-by-case basis and could depend on a few things, like:

Over the course of a 30-year loan, the savings could be substantial.

"On a $300,000 loan, you're probably going to save about a hundred dollars a month if you can drop the interest rate a half percent," Bulbrook said. That adds up to about $36,000 over the course of the loan.

Bought a house five or more years ago? You may be able to refinance to remove mortgage insurance, which saves even more money.

"Of course, mortgage insurance only applies if you didn't put down 20 percent on your home."

Refinancing can take up to three weeks and could cost anywhere from $1200-$1500, so it's important to compare how much you're spending to refinance to how much you'll save.

Experts say if your current rate is over 4.24 percent, it might be best to call your broker to see if refinancing could be a money-saving option for you.