RATES can't go lower. Or so advertisements from mortgage companies have been claiming for years. But it's possible that now it's more true than ever.

According to research done by Freddie Mac, the average rate on a 30-year mortgage in the U.S. dropped below 4 percent for the first time ever in 2011. Rates on shorter-term, 15-year mortgages are even lower.

For some, this may create a great opportunity to refinance your mortgage, but doing so often isn't the best decision financially for families in certain circumstances. Here are four things to consider before you make any decisions:

1. How much equity do you have?

Refinancing may be a priority for homeowners with disadvantageous loan terms or who owe more on their home than it is worth. But these situations can make it difficult to qualify for refinancing. Your first step should be to consult with your mortgage company about whether arrangements can be made to structure a different financing package for your home.

2. Why do you want to refinance?

Locking in a historically low rate can be appealing, but is it a fit for you? If you are within a few years of paying off your mortgage, it may not make sense for you to restart with another 15- or 30-year mortgage. If you're focused on reducing your total debt, financing your home for an extended period of time may not be a favorable move.

Many who do have significant equity in their home refinance to "cash out" some of that equity for other purposes. But it can be risky; this strategy backfired on many homeowners when housing prices crashed in recent years.

3. Are you in a position to refinance?

If you have run into credit problems due to the sluggish economy, refinancing may not be as easy as it used to be. Households need to have a sufficient credit score - usually 700 or higher - to be able to qualify for a conventional mortgage.

Employment status could be another factor. A number of Americans, some involuntarily, have recently left the work force and started their own business. If you don't have an established record of income yet as a business owner, it might be a difficult time to obtain a new mortgage.

4. Determine the terms that suit your needs

If everything else works out and refinancing seems to be a good choice, the final question is whether to opt for a 15-year or 30-year mortgage. An adjustable-rate mortgage is also an option, but since the terms of those loans are subject to change, it may not make sense given the historically low rates that exist today.

If your primary goal is the lowest possible payment, a 30-year loan makes sense. If you are trying to focus on reducing debt and accumulating wealth, a shorter-term loan may make more sense. If you ultimately decide to refinance, be sure to compare costs of different lenders. The break-even point on the cost of the loan (the number of years you need to keep the mortgage before the costs of obtaining a new loan are overcome) is a critical measure of whether refinancing is a worthwhile move for you.