NEW YORK, July 31 (Reuters) - Q. How soon can I refinance a mortgage?

A. Theoretically, you can refinance most mortgages at any time, but that doesn't mean borrowers should rush to the closing table, especially in the current interest-rate environment. I spoke to five experts who say the real question isn't "how soon," but "does it make financial sense?"

Here are the key factors ​to consider before you refinance your mortgage:

"There's often no limit to how soon or how often you can refinance a mortgage, but ‌many lenders have their own 'waiting periods' or 'seasoning' rules, typically requiring six months of payments before considering a refinance," explains Lisa Clements of Clear Springs Wealth in Overland Park, Kansas.

Any refinancing barriers ultimately come down to the fine print: "There may be restrictions placed on the loan contract, especially if you got a special deal," says Kashif Ahmed, a certified financial planner at American Private Wealth in Bedford, Massachusetts. Some states even prohibit prepayment penalties ​outright, Ahmed notes.

Every expert I interviewed points to the same core issue — refinancing isn't free and steep fees can erase any savings from a ​lower rate. Refinancing means you are essentially going through the closing process again with the lender, which includes significant costs due at signing.

"Saving $150 ⁠a month on a new rate might still require paying $8,000 in closing costs, pushing the break even point years down the road," says Bill Shafransky, senior wealth adviser at Moneco Advisors ​in New Canaan, Connecticut.

A handy formula to test whether refinancing is worthwhile: divide total refinancing costs by monthly payment savings to calculate how long it will take to break even. Clements ​warns that if it is going to take 36 months, but you plan on moving in 24 months, it does not make sense to refinance.

You need to do your homework, too. I had fun playing around with LendingTree's refinancing calculator, opens new tab to see what options we might have for the mortgage on our New York City condo. The short answer: none.

Indeed, Brian Grzebin, president of mortgage banking at Univest Bank and Trust in Marlton, ​New Jersey, urges borrowers to compare offers rather than accept the first quote. "Shop around," Grzebin says, noting that upfront costs typically run about 1% of the loan amount in fees, plus ​appraisal and processing charges. (Processing fees are often the biggest expense.)

Some lenders no longer require title insurance, which can reduce costs for borrowers who refinance soon after purchase, Grzebin adds.

Deciding when to ⁠refinance your mortgage, which is typically tied to the 10-year U.S. Treasury bond, is all about the direction of interest rates. And mortgage rates hit new highs in the most recent week. The contract rate on a 30-year, fixed-rate mortgage — the most common U.S. home loan — climbed 7 basis points to 6.76% in the week ended July 24, just shy of a one-year high, the Mortgage Bankers Association said on Wednesday.

Things could get worse before they get better because the U.S. Federal Reserve's next move is likely a rate hike rather than a cut, possibly as early ​as September, says Matt Schulz, chief consumer finance ​analyst at LendingTree. "Unfortunately, that means Americans ⁠should plan for interest rates to stay higher for longer than they’d like."

But sometimes bond prices dip on a major market event, and you should be ready to pounce. While my team of experts offer slightly different refinancing thresholds — a rate drop of anywhere from 0.5% to ​1% could be a smart time to refinance — all agreed a modest rate dip alone usually isn't enough to move the needle.

In fact, ​the current interest-rate environment ⁠will continue to make refinancing a non-starter for many Americans. "There are a lot of people out there with 3% and 3.5% mortgage rates," Grzebin says. "They're not going to refinance, unless they need cash."

Grzebin, speaking from personal experience, explains why some borrowers are avoiding refinancing altogether. Having locked in a rate of 2.875% during the pandemic, he says refinancing is not a viable option. "I live in one of ⁠the most ​expensive states," Grzebin says. "If I could move to a southern state, I would."

Finally, if you do decide to refinance, ​the interest rate you will pay depends heavily on your credit score — the better the score, the lower the rate. (Scores of 740 and up tend to get the better deals.) Make sure you are on solid ground by ​paying your bills on time and avoiding the urge to max out your credit. Here are some handy tips to help you boost your credit score.