Don't expect zero/zero loans to be around forever. Lenders have figured out that homeowners have the sense to detect a good deal, and with slowing interest rates, these loans are starting to cost them money. Some are using a pre-payment penalty, so that's another thing to watch for in your paperwork.

To decide whether to use a zero/zero loan for your refinance, follow the following steps:

1.Calculate your point cost; two points on a $100,00 loan is $2,000.

2.Calculate the monthly savings you'll gain on the loan from a lower interest rate.

3.Divide the point cost you calculated by the monthly savings. This will tell you how many months you'll need to have the savings in order to break even.

4.Remember that points are tax-deductible; you'll save an additional amount because you will not have to pay taxes on the cash you pay for points. If you're refinancing, points are NOT tax-deductible, so you don't have to worry about the taxes at all.

If your head is spinning after that, just use this rule: If you're going to stay in the house for less than three years, don't pay points. If you're going to stay for over five years, one to two points is probably a good idea. If you're staying for between three and five years, points or no points, it doesn't matter.