Your speed and skill in playing the refinancing game can save you money by winning you a lower interest rate. Learn how to push your application to the top of the pile.

He who hesitates is lost – or at least sometimes stuck with a higher interest rate.

That’s the lesson thousands of people learned back in mid-March when interest rates dropped to 40-year lows. A record number of mortgage applications flooded the nation’s lenders, jamming phone lines and overwhelming loan officers.

Then rates suddenly popped back up by nearly half a percentage point. Those who didn’t beat the crush found themselves facing higher payments than they’d planned.

“A lot of consumers learned the hard way,” said Doug Perry, first vice president for Countrywide Home Loans, “that rates drop slowly but rise very quickly.”

There are other reasons to move fast once you start the refinancing process. For one, you risk a drop in your credit score the longer you dally. Every time you apply for credit, your credit score -- the three-digit number used by lenders to evaluate your creditworthiness -- can go down.

Fortunately, the credit scoring system most lenders use, FICO, doesn’t punish you if you do your mortgage shopping in a relatively condensed period of time. All credit inquiries made within 14 days are lumped together as one, and your score doesn’t reflect any inquiries made within the last 30 days.

The problem, of course, is that just when you’re ready to make your move, a lot of other people probably are, too. The lower the interest rates, the more competition you’ll face trying to get lenders’ time and attention as applications tax their systems to the limit.

Here are some strategies to help push your refi application to the top of the pile.

DO YOUR FOOTWORK AHEAD OF TIME

You should understand the basics of how refinancing works and what various terms mean before you apply. There are websites on the Internet that will walk you through the process. You should also know what the prevailing rates are (check out Bankrate.com) and whether you want to pay points to “buy down” your rate to a lower level. Get quotes from several lenders that include their rates, points and fees. Once you have that information, decide whether you want a fixed-rate loan, an adjustable or a hybrid (which remains fixed for three to seven years before becoming adjustable). If you decide on a fixed-rate, determine whether you want a 15-, 20-, 25- or 30-year loan. (The shorter the loan, the faster you build equity and the less overall interest you pay.)

Once you’ve done that footwork, you’ll be ready to pounce.

DON’T TRY TO HIT THE ABSOLUTE BOTTOM

For one thing, it’s impossible. Nobody knows in advance how low interest rates might go, or when they’ll start to climb. Rather than drive yourself crazy trying to predict the unpredictable, find the best deal you can and lock it in.

Besides, stalling your lender while you wait for rates to fall is usually counterproductive. Not only might rates rise instead, but your lender may decide your indecision is a sign that you’re not really serious about refinancing -- which could drop your application back to the bottom of the pile.