Q: I bought my home two years ago with a fixed-rate loan. I had to pay a rather high 8 percent rate because I had some previous credit problems, but those problems have since fallen off my credit record, and I would like to refinance with a lower-rate loan. But is it true that refinancing doesn’t make sense unless you can cut at least two full percentage points off your current mortgage rate?

A: No, it’s not true – though I still hear some self-proclaimed “experts” repeat that outdated advice on a regular basis.

Homeowners should consider three main factors:

¢ How much they’d save each month by refinancing.

¢ How much the lender would charge in fees.

¢ How long they expect to remain in the home.

Let’s say that you could swap your 8 percent loan for a 6.5 percent loan. On a $150,000 mortgage, your monthly payments would drop by $53.

If you divide the cost of getting the new loan ($2,000, for example) by your monthly savings ($53), you end up with a figure of about 37.7. In other words, it would take about 38 months before your savings would offset your costs.

If you planned to remain in the home for at least 38 more months, it probably would make sense to refinance now. But if you expected to move sooner, it would be best to avoid refinancing today.

Q: A few months ago, you wrote that the nation’s three biggest credit bureaus had introduced a new type of credit score called “VantageScore.” I learned that my VantageScore is 820. Is that pretty good?

A: The new scoring system ranges from a low of 501 to a high of 990.

Consumers who score in the 901 to 990 range are considered “super prime” and generally are entitled to the lowest rates on mortgages, credit cards and the like. Your score of 820 falls between 801 and 900, which makes you “prime plus”: You probably won’t get the very best loan rates, but you should get a better deal than those who score in the 701 to 800 “prime” range.

Those who score in the 601 to 700 range are considered “non-prime” and should expect to pay a higher rate or extra fees.

Finally, those in the 501 to 600 range are considered “high-risk” and must usually pay the highest rates – if they can qualify for a mortgage at all.