Mortgage rates are at all-time lows again -- which means that if you can refinance to a lower rate, you could save significantly on your monthly mortgage payments. Aside from the hoops you have to jump through to qualify, what if your home is in a "declining market"? Your refi might not be smooth sailing.

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In 2008, Fannie Mae and Freddie Mac implemented a new policy of increasing requirements for borrowers whose homes were in zip codes tagged as "declining markets." The mortgage behemoths backed down after protesters accused them of redlining, an illegal practice of discriminating against minority-dominated neighborhoods. But that doesn't mean the idea hasn't lingered.

What is a declining market?

Your neighborhood is a declining market if an appraiser says it is, or if the (non-government) mortgage lender you're working with says it is. When you compare mortgage quotes, ask what the lender's declining market policy is and if your neighborhood is considered a declining market. If the lender works from a list and you're on it, you may have to pay more, provide more equity or come to the table with better credit.

Even if your lender doesn't keep a list or you're not on it, you still might not be in the clear. Several years ago, Fannie Mae created Form 1004MC, the "Market Conditions Addendum to the Appraisal Report." This form is required with virtually all one- to four-unit property appraisals and determines how your refinance is treated. Again, ask every lender you shop with how it classifies home markets and how it will affect your refinance if your home is in a "slightly declining" or "substantially declining" market. If you have enough equity, you may still be able to refinance.

How appraisers assess your market

In calculating the supply, appraisers first determine the rate at which homes are being sold (called an absorption rate). If 60 properties were sold in the last six months, the absorption rate is 10 per month. If there are 100 homes on the market, that's a ten-month supply.

Is this good or bad? That depends. Ten months of inventory would normally be considered an over-supply. But what if the absorption rate six months ago was 5 homes per month? What if there were 200 homes on the market six months ago? You could conclude that the market is improving, not declining.

Sales data are examined at three-month intervals to see whether prices are stable, increasing or decreasing. Finally, the days-on-the-market statistic is checked. Are home sales speeding up or slowing down? Are buyers getting more concessions or fewer? All of these factors are considered when assessing the market trends of your area.

How to assess market trends yourself

Want to get a rough idea of your local market? See where your metro area or zip code falls on these lists:

You can also check home value estimate sites to keep tabs on home price trends in your neighborhood.

These lists or models won't give you an accurate valuation of your home, but they are quite good at flagging trends.