With historically low rates, many homeowners are watching closely for the right time to refinance their mortgages.

Those with good credit may well recall being showered with praise by a mortgage broker during the initial purchase for that solid credit score.

That was then. This is now.

A few years ago, a score of 620 or higher was good enough. That increased to 680 in early 2008. Then it jumped to 720 in April last year and 740 in August, says Rodney Anderson, senior managing partner of Plano, Texas-based Rodney Anderson Lending Services.

In the past, any score of 700 or higher would get a double thumbs-up from credit experts. Now rate adjustments begin kicking in at 740, with every 20-point drop adding another adjustment.

In other words, many people who were taking pride in their credit habits either must pay significantly higher or try to make quick changes to nudge their scores upward. "What used to be great is now only good," says mortgage broker Todd Huettner, president of Denver-based Huettner Capital. Refinancing that would have worked a year ago might well not make sense, he adds.

"I have clients all the time who literally wind up with a score of 739, 719, 699, 679, and it costs them money to either fix it or pay for it," Huettner says.

One of Huettner's clients, who always had a score of about 740, went to do a refinance and found her current score at 719. "The reason was, she put a new washer and dryer on a store credit card," he says. Many store cards are actually revolving credit, which means your limit is essentially your starting balance. So that purchase maxed out her card and caused a 23-point score drop.

Take the application that Stamford, Conn.-based Luxury Mortgage Corp. got recently. Interested in lowering the rate on an existing mortgage, the borrower could verify substantial income, assets and personal credit history, says chief executive David Adamo. But the borrower's credit score had taken a hit after co-signing an auto loan for his son that had not been paid timely.

"As a result, the borrower, who otherwise met every other criterion, was unable to refinance the loan at a rate that made economic sense," Adamo says.

Another wrinkle in today's market: Even those with FICO scores of 740 or higher are penalized for buying in a geographic market on the downswing. "This adjustment affects all borrowers, regardless of score, if in a declining market," says mortgage broker Jim Heidelberg, president of Heidelberg Capital Corp. in Tampa, Fla.

In many cases, the added costs of rate adjustments are "enough to make a refinance that would otherwise make sense have no benefit to the borrower," Huettner says.

How did we get to this new reality?

The nation's two largest mortgage lenders, Fannie Mae and Freddie Mac, suffered major losses in the market last year and then redefined risk, announcing price adjustments for borrowers with FICO scores below 720, says Sean Cragg, vice president of sales for Ann Arbor, Mich.-based Gold Star Mortgage Financial Group.

And, in case you were wondering, "these fees have nothing to do with your mortgage company or its various products and cannot be negotiated away," Cragg says.

All mortgage bankers, brokers and credit unions must comply with the higher interest rates and delivery changes in all traditional mortgages, says Heidelberg. Only entities intending to hold the mortgages in their own portfolios can follow their own guidelines.