Think about a mortgage do-over.

You could be out hundreds of dollars a month if you signed for a large home loan last month.

This month qualified home buyers and those refinancing their mortgage are getting jumbo conforming loans with an interest rate nearly a full one percentage point cheaper than it was just weeks ago.

On a $500,000 mortgage that's a savings of more than $300 a month. On a $730,000 mortgage--a whopping $500 a month. That's a lot of gas money.

The Economic Stimulus Act of 2008, temporarily raised the maximum amount on conventional conforming loans from $417,000 to about $730,000, hoping that would prompt lenders to lower rates on the larger mortgages to levels for smaller mortgages. Initially, risk averse lenders, buried under foreclosures, were not convinced.

In recent weeks, however, Fannie Mae and Freddie Mac announced they would purchase the larger conforming loans with the same requirements they use to purchase loans at the old conforming loan level.

That opened the flood gates on lower rates for bigger mortgages. Whoo hoo!

Fannie Mae and Freddie Mac have also reduced down payment requirements on some loans to as little as 3 percent down. More whoo hoo!

That move, along with new FHA loan plans, also put more mortgage money on the market.

And with home prices falling in many regions, happy days are almost here again for some housing consumers who can now drive a hard bargain with both sellers and lenders.

So here's the burning question: If you got a mortgage a month or so ago with the higher rate, should you refinance already?

Yes. Especially if you can get a no-point, no-cost refinance, says Quincy Virgilio, broker owner of Realty World CA Property Network in Campbell, CA.

"It is definitely a viable option to look into," said Virgilio, who is also president-elect of the Santa Clara County Association of Realtors.

Eric Nelson with the Honte Group, also in Campbell, agrees.

"If you are going to save $400 a month and it costs $4,000 to do the deal and they can recoup that cost in a year, we would recommend that. If they are going to save $400 a month and it costs $8,000 and they will take two years to recoup the cost, we probably wouldn't recommend it," Nelson said.

"Look for a no-cost, no-points loan, but make the simple calculation on how much you are saving and how much it is costing," and how long you'll stay in the home, Nelson added.

Sit down with a mortgage broker, loan officer or financial planner and do the math.

Published: May 27, 2008

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.