When refinancing, first consider how long you might be keeping your home, because the overall amount of savings from your mortgage can vary depending on the specific refinance home loan program, and the associated rates and costs. 

For example, a good way to save money if you plan to stay in your home for a short time, is to use a zero point, or a zero cost refinance loan, because if you move or refinance your home again later, you're not wasting any money. Another option is a 3 year, or 5 year mortgage refinance with a lower initial rate that is fixed. Also, see FHA loans if you have a high loan to value, or low credit scores.

Other short term refinancing includes the 6 month, or 1 year ARM. To attract borrowers, lenders often provide adjustable refinance rates that start lower than a fixed rate mortgage. Every 6 months or 1 year, the rate is adjusted based on the index plus the margin, and is subject to periodic and lifetime rate caps. The index is usually based on the 1 year T-Bill, Cost of Funds, Treasury Average, or LIBOR. The margin is a fixed number set by the lender, which can range from 2.25 to 3.00. 

Refinancing to a 30 year fixed rate home loan can be a safe bet, however, if your goal is to keep your house until it is free and clear, you may want to consider a 15 year fixed refinance loan. The interest rate is a little lower, and the payments are higher, but the principal reduction is accelerated, so you can drastically reduce the total amount of interest paid over the life of the mortgage.

For example, the monthly payment for a $200,000 refinance home loan, for a 15 year term would be almost $500 per month more than a 30 year term, but it would also save about $128,000 in interest payments. Technically, you could achieve similar results on a 30 year mortgage by sending an additional amount each month to be applied to the principal balance, if you have the discipline.