What is QE2? It's not the luxury cruise ship -- it stands for "quantitative easing," and it refers to the second round of a Federal Reserve program in which the agency will buy an additional $600 billion of Treasuries (along with an estimated $200 to $300 billion in re-investment of maturing securities). The move is expected to stimulate the economy and drive interest rates still lower. Even if you refinanced earlier this year, it might be a smart move to take the refinance journey once again.

QE2: Your ticket to refinance at the lowest mortgage rates ever?

Refinance mortgage rates were at just over 5 percent earlier this year. You may have refinanced into a new home loan then and figured that you were done. But now the news is all about QE2, and industry insiders are speculating that mortgage refinance rates will go even lower -- perhaps much lower. Should you bite? At what rate should you consider refinancing again? Refinance mortgage lenders often say that if you can drop your rate a half percent, it's probably worth refinancing again. But the decision is a little more complicated than that.

Mortgage refinance decision: the no-brainer

Any time you can get a lower mortgage rate at no cost, the decision is simple. As the Nike folks say, Just Do It. When requesting mortgage quotes, stipulate that you want a true no-cost refinance -- no lender charges, no title charges, no appraisal fees. Zip. Nada. Zilch. The interest rate will be higher than what you'll see listed because the best mortgage rates cost money and conversely the lowest cost mortgages have higher rates. The good thing though is that you begin saving right away and there is no break-even point. This is a great option if you have absolutely no idea how long you will keep your property.

Mortgage refinance decision: the short-timer

You have a 5 percent mortgage (yawn) and would love a sexier rate but you can't recoup the cost of a refinance fast enough. Unless you can. Short times can get the sexiest rates of all -- 5/1 hybrid mortgage rates are lurking near 3 percent and could go lower! Check out the Guide to Lenders "Time to Refinance" calculator. If you refinanced a $300,000 mortgage at the beginning of this year and got a 5 percent mortgage rate, and you took out a 5/1 hybrid ARM at 3 percent and paid $6,000 in closing costs, in that 5-year period you'd save over $23,500. That's free money!

Targeting your mortgage refinance rate

Targeting your refinance mortgage rate is not that hard to do. First, you'll want to get an idea of what rates are available to you. Get a few quotes from several lenders, preferably with Good Faith Estimates (GFEs) that detail the closing costs. Check with your current title insurance company and ask about a short rate, which is a discounted rate that is available when you've had your current mortgage less than a year or two. The savings can be significant.

Next, input your loan information and the best of the mortgage quotes that you receive (adjusting your title charges downward if you qualify for that short rate). If that rate/cost combination does not result in savings over the time that you intend to keep the property, try a lower rate or lower costs and repeat until you get some positive savings. That will be the upper end of an acceptable interest rate range for you. When mortgage rates drop into that range, get some more quotes and choose the best one.

Pulling the trigger

You might also want to get pre-approved for your refinance while waiting for rates to drop into your target range. Mortgage rates change very quickly and the best rate may be available for only a few hours. If you are pre-approved you are in a better position to lock at a moment's notice and close on your refinance quickly.