Is your family planning to be in the same home for several years?

If so, consider making some changes if you recently took out an adjustable-rate mortgage or an interest-only mortgage. You might be able to save money in the long-run by refinancing to a fixed-rate mortgage.

The difference between rates on fixed-rate mortgages and adjustable-rate mortgages has shrunk, notes Fannie Mae, in a September mortgage market report. It's now about 1.25 percent, down from 2.50 percent in May 2004.

Bottom line: Unless you only plan to be in your home a very short time, adjustable-rate mortgages may prove unwise.

Most people will get a mortgage payment increase if they have a typical 2 percent annual rate cap on a one-year adjustable-rate mortgage, according to the report.

It works this way:

Say you took out a $200,000 mortgage using a one-year Treasury-based adjustable-rate mortgage last year at 4 percent:

Your first-year payment of principal and interest would be about $950 monthly, notes Fannie Mae. Today, assuming your mortgage has a 2 percent annual rate cap, you'd be facing a 2 percentage point rate increase in mortgage rates. That's a 25 percent increase in your monthly payment -- to $1,200!

Your mortgage payments could go even higher. Fannie Mae expects rates to increase over the next year.

What if you have a fixed-rate mortgage with interest-only payments?

Be prepared for a double payment shock when the fixed-rate term expires. You still are likely to owe the full amount of the loan. But after the fixed-rate period, many mortgage deals require that you pay back full principal and interest in just 10 or 15 years. This means you will have higher monthly payments compared with a standard 30-year fixed-rate mortgage.

Unfortunately, refinancing often is riddled with upfront "closing costs" and "points." One point equals 1 percent of the loan amount.

Don't be fooled by these tricks:

We've seen lenders promote "no closing costs." Yet, they continue to charge certain fees, like title insurance or appraisal fees.

We've seen other lenders promote no fees, but actually role them into the loan balance -- costing you more in the long-run.

It's not uncommon for lenders to quote mortgage rates that are good for exactly one day.

Once you've determined whether you can qualify for the new mortgage that you want, here are some ways to minimize refinancing costs:

Try to refinance with the lender that has your current mortgage. Lenders who don't want to lose your business may modify your loan rather than require you go through the greater expense of refinancing.

Review and question every fee that you don't understand. Try to negotiate.

If you've obtained title insurance recently, ask your lender for a lower-cost "reissue" title insurance policy. Chris Zehnder, a St. Cloud, Fla., financial planner and former mortgage banker, says this move saved one of his clients $4,000.

If you deal with a financial adviser, ask him or her about refinancing. Some lenders eliminate some fees to clients of financial advisers.

Try not to extend your loan term. Some lenders will customize your term.

Try to get private mortgage insurance charges waived if the value of your home has appreciated.

Refinancing through a new lender? Check first with its regulator for complaints.

Examine and correct your credit report before applying. You can get a free annual credit report at www.annualcreditreport.com or 1-877-322-8228.

Consider obtaining a written "rate-lock." This way, you have a document showing that your rate and/or points are guaranteed for 30 or 60 days. Otherwise, any rate dispute with the lender will be tough to prove. Some lenders charge for a rate lock to prevent you from seeking a lower rate if rates drop.

If your mortgage broker deals with several lenders, see if you can get a copy of a commitment from the actual issuer of your loan. It's not uncommon for mortgage companies to go out of business during periods of heavy refinancing. With a written commitment, you still stand a chance of closing.

Call your lender periodically to make sure inspections, title searches and other steps of the mortgage process are proceeding on schedule.

Check with your accountant about taxes. Get the lender to have any fees charged to you as "points," which may be tax-deductible over the life of a refinanced loan. Zehnder says that in some instances, you can write off not-yet-deducted points on your old loan in the year you refinance.