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Thanks to falling interest rates, many a homeowner now is entertaining visions of writing smaller monthly mortgage checks.

For those who have adjustable-rate mortgages, the break should be coming automatically as their payments come up from recalculation.In the case of traditional fixed-rate mortgages, however, it raises a more complicated question - whether to refinance.

"Fixed rates have plunged to their lowest levels in five years," says the newsletter 100 Highest Yields, based in North Palm Beach, Fla., which reports that mortgages can now be had for not much more than 9 percent, or even lower, in several areas of the country.

"Homeowners saddled with mortgage rates of 10.5 percent or higher should now think about turning in that financial albatross for something cheaper."

A few fairly simple calculations can give candidates for refinancing a rough idea of whether it is worth taking the trouble.

But before anyone decides finally to trade in an old mortgage for a new one, experts on the subject say, there are significant other factors - such as taxes - that have to be considered.

One of the first things to determine, logically, is how much you can lower the cost of borrowing a given amount of money by switching from one loan to another.

For $100,000 borrowed with a 30-year term, for example, 100 Highest Yields notes that a quarter-point difference in interest rates translates into $18.50 per monthly payment.

So if you could replace a 10.5 percent mortgage with one for 9 percent, your monthly payment could be lowered by about $110.

Armed with that figure, you can then compute whether the amount saved justifies the costs of refinancing, such as application and appraisal charges and "points" - up-front fees usually charged by lenders when they make new loans.

A point is one one-hundredth of the total amount of a loan. So, say, 21/2 points on a $100,000 mortgage would be $2,500.

Once you know these numbers, you can compute your "payback time" - how long it will take for the difference in monthly payments to recover the initial costs of obtaining a new mortgage.

If those costs were $4,400, for example, a $110 reduction in the monthly payment would cover them in 40 months, or a little more than three years.

However the equation comes out, it can easily be unbalanced by tax considerations - starting with the fact that mortgage interest is a prime deduction taken by many taxpayers.

If you lower your outlays for mortgage interest, the after-tax savings thus may be smaller than they might appear at first since the tax deduction will also be smaller.

A good many of the costs to obtain a new mortgage, meanwhile, may not be deductible at all on current tax returns.

As long as you are refinancing, of course, you can do a lot more than just replace one loan with another of the same size. To name just two of the many possibilities, you can seek to increase the amount of the loan, pulling some cash out of the property, or you can trade into a shorter-term loan to get the house paid off faster.

Whatever your intent, cautions 100 Highest Yields, "unless you work out the math carefully, you could lose in the refinancing process."