A lot of people say you could consider refinancing if current interest rates are more than a percentage point lower than what you're paying. But, in this housing market, the decision to refinance is not that easy.

The appraisal is an important part of any refinancing opportunity. Banks use appraisals to make sure homes are worth the amount of an anticipated loan. Right now, the appraisal business is booming as lower rates have more and more homeowners wanting to refinance.

“I'm paying 6.25 (percent) now and the new rate is 4.25,” said Bob Marshall as an appraiser looked over his home recently.

Bob Marshall hopes his home hasn't lost value, as many others have in this housing bust.

“I am concerned,” he said.

“The comparable sales indicated buyers out there are not willing to pay for what we had appraised it for two years ago, a drop of some $30,000," said appraiser Skip Sage.

Appraisals prevent many people from getting lower rates.

“Just because rates are down does not mean refinancing is a viable option for you,” said Tonya Collister of Consumer Credit Counseling Service of Springfield.

Homes that sold for more than $250,000 have been hit the hardest by falling values. That calls into question the rule of thumb that an interest rate drop of 1 percentage point or more is all you need to refinance.

Here is an example of when refinancing is not a good option. Let's say you bought your $300,000 house five years ago -- and your equity is now $30,000. The problem is home values have dropped, so your house may now be appraised for just $285,000. To make matters worse, with tougher lending standards, you may need 20-percent equity to refinance, which is $57,000. But remember, your current equity is just $30,000, leaving you $27,000 short of getting a conventional loan.

"You don't have to have 20-percent down but, if you don't, you'll end up with mortgage insurance or extra costs," said Julie Barker of Oakstar Bank.

And don't forget the other costs of refinancing.

"It's not just the interest rate you're going to pay. You're going to pay closing costs, so you need to consider how long it will take to recoup those costs," said Collister.

Barker says lenders would be happy to sort through the confusion.

"We have people call and say, 'I can save 1 point on the mortgage rate so I need to refinance.' We say, 'Timeout; let's look at it and customize to see if it makes sense,'" she said.

Barker provided some helpful tips to consider before refinancing. To see them, click here.

Also, for a handy calculator that you might find helpful, click here.