With mortgage rates firmly in single-digit territory and now at their lowest level in about four years, more recession-weary American homeowners are taking steps to refinance old loans.

Inquiries reportedly are coming in by the thousands from those eager to cut monthly house payments or extricate themselves from fickle adjustable-rate mortgages. Refinancing applications already are up moderately from a year ago, many mortgage bankers say.

"I think that's going to continue to pick up. We're on the verge right now of having a wave of refinancings," said David J. Guilford, executive vice president for Charlotte, N.C.-based BarclaysAmerican Mortgage Corp., one of the nation's largest mortgage bankers.

"We certainly need it," he said. "The economy and war in the Middle East had put the brakes on sales activity."

Ironically, those two factors, along with lower inflation, also have helped limit further interest rate increases. The Federal Reserve has aggressively sought to keep rates down over the past two months to help the economy out of its current downturn, which was accelerated by the Middle East crisis.

Spurred by the declines of rates in the credit markets, lenders have been steadily reducing the interest on both fixed and adjustable-rate mortgages (ARMs).

By the end of last week, for instance, the national average for conventional 30-year, fixed-rate mortgages stood at 9.47 percent, down from 9.65 percent the last week in January and the lowest level since April 1987, said HSH Associates, a Butler, N.J.-based mortgage research firm. The average rate on one-year ARMs dropped nearly one-tenth of a percentage point to 7.56 percent, it said.

Even lower rates are plentiful. HSH said more than 300 lenders nationwide are offering 30-year fixed rate loans at 9 percent or lower while more than 50 have rates as low as 8.5 percent.

Lenders say homeowners with rates of 11 percent or higher on their mortgage loans, prevalent as recently as last spring, have refinanced with the lower fixed rates in recent weeks. Others who are refinancing include homeowners with ARMs, which are adjusted at specified intervals to reflect prevailing interest rates, usually based on the return of a one-year Treasury bill. Others are consolidating consumer debts into one loan, or getting a home equity loan.

Stephen Ashley, chief executive for Sibley Mortgage Corp. in Rochester, N.Y., said mortgage applications are up around 15 percent over a year ago, with most of that coming from refinancing deals. Other lenders have given similar numbers.

"I think it's still too soon for the lower rates to have an effect on the thinking of the home buyer," Ashley said.

He noted that the Persian Gulf War and recession have helped depress demand for real estate. But he and other experts predicted that steady interest rates or further declines could help revive the sagging market, particularly when the traditionally busy spring home-selling season gets underway next month.

For now, though, some lenders are banking on a rise in refinancings.

"We're getting more and more inquiries about refinancings," said Ronnie J. Wynn, president of Colonial Mortgage Co. in Montgomery, Ala., and former president of the Washington-based Mortgage Bankers Association of America.

Guilford, of BarclaysAmerican, said the volume of inquiries has been so large that he plans to add three more people to his sales staff.

But refinancing isn't for everyone. According to general real estate wisdom, homeowners should consider this move only if prevailing market rates fall at least two percentage points below their mortgage rate and they plan on staying put for awhile. Otherwise, with closing costs running anywhere from 3 percent to 5 percentage points of the refinanced loan, it may not be worth it, they said.

For those who refinance, the savings on their monthly housing payments could be significant.

Take a homeowner now paying 11 percent on a $100,000 30-year mortgage. After refinancing at 9 percent, payments on the loan would be reduced by about $166 a month and nearly $2,000 a year. With closing costs of $3,000, those savings would be cost-effective after 18 months.

Another word of caution, though, is that not every homeowner may be able to refinance, particularly those living in regions with rapidly falling housing values.

Wynn, of Colonial Mortgage, notes that homeowners may not qualify if the current value of their home falls below 90 percent of the applied for loan.

"That impact in certain areas of the country will reduce the amount of refinancings," he said.