Whenever interest rates drop, a refinancing frenzy naturally follows. Whether you’re looking to trim your mortgage payments, eliminate credit-card debt or pay off your car loan, experts say you should fully understand all of the options available to you before deciding to refinance.

Allied Mortgage Consultants, a mortgage company recognized for educating consumers on the realities behind new home loans and refinancing, reveals seven common mistakes people make when refinancing.

1. Not saving enough to justify refinancing. It’s best to decrease your rate by at least .75 percent to 1 percent. This will save you about $100 a month on a $150,000 mortgage.

2. Not knowing your closing costs up front. By law, closing costs must be disclosed within three days of the loan application. However, there are different approaches to calculating them. Until the details of your loan are clear, the closing costs quoted to you are only estimates. Plan for the worst-case scenario.

3. Not fully understanding your reasons for refinancing. Besides reducing your interest rate, there are other legitimate reasons to refinance, such as debt consolidation, home improvements or major purchases. In some cases, you may be able to deduct your interest payments on your tax return. Always consult an accountant or tax attorney before making these types of decisions.

4. Not being aware of APR “teaser rates.” Some mortgage brokers use annual percentage rates to get your attention, but it may actually end up costing you more. APRs often are derived by using a 30-year mortgage coupled with an accelerated payment plan. Make sure you know the actual interest rate you will be paying throughout the life of the loan.

5. Not weighing the pros and cons of adjustable rate mortgages. ARMs can minimize your monthly payment, but not if additional refinancing occurs. In this case, they can cost more in the long run.

6. Not being aware of the service you should expect from a mortgage broker. The process of refinancing should be hassle-free and accomplished quickly. Ask your mortgage broker to provide details of its service plan and performance guarantees.

7. Not knowing to ask the mortgage broker about all available loan products, terms and rates. Subtle differences can save or cost you thousands of dollars.

Debt reduction, a lofty goal, is also extremely difficult to carry out.  As long as swiping your card feels easier than paying cash, you’ll find yourself stuck in a downward spiral of credit card debt.  Continued use combined with high interest charges means your credit card debt will just keep growing over time.  A good offense is the best defense; stop the cycle now and take steps to free yourself of consumer credit card debt.

Here are some credit repair tips that can help you dig out from under a mound of debt:

The first, most important step- reduce your spending.  Before you embark on a plan to pay off your debt, you have to commit to not accumulating any more.  Get rid of all but one credit card; keep this card for use in emergencies only.  Make sure the card you keep has a low credit limit and a low interest rate.

Transfer your existing balances onto a card that offers a limited-time 0% interest rate on balance transfers.  During that period, maximize your payments; your money is going entirely to pay down the principle because there is no interest accumulating.  You can transfer your balance more than once if necessary; jut watch the mail for offers from your credit card companies.  If you don’t have a card that offers a 0% rate, then transfer your balances onto the card with the lowest rate.  Reducing your interest even slightly can have a dramatic effect on your balance; the more you owe, the more this transfer will save you money.

Set up an automatic payment with your bank.  Automatic payments ensure your payment is made in full and on time every month, which will help you with your credit repair.  Some credit cards will agree to lower your interest rate if you are making automatic payments so talk to your customer service associate to see if you can negotiate.

Consider a debt consolidation loan.  By consolidating your debt, you can reduce your monthly payments and cut your interest payments.  These loans usually charge with a much lower interest rate than do your credit cards so you will save money in the long term.  Because you will only have one bill a month to pay, you are much less likely to send it in late or to forget to send it.