I hear many times you should re-finance when the difference in rate is 1% or better. This is quite a broad statement. There are so many reasons to refinance and rate is just one of them. Expanding your loan balance to re-steructure your debt is a better approach than just having a lower rate and high balance credit cards. These credit cards can be a major trap when used improperly. The reverse is also true. Take for instance a common scenario- a great credit buyer with a small down payment. FHA rates are fantastic righ now; mortgage insurace isnt. A borrower may be in a position to take advantage of a credit card advance at a zero or low purchase interest rate. Take this cash and pay down a loan balance without affecting a debt ratio and take that mortgage insurance payment that you would have been making and pay off the advance rather than insurance which yields you nothing. The savings can be drastic. It pays to have great credit and it gives you options some buyers dont have.