The Federal Reserve continues to lower interest rates to perhaps pump some more energy into an economy with weak spots. That means things like mortgage rates could come down as well, but, of course, there's no guarantee on that. In fact, bond market participants are currently betting we get fewer rate cuts from central banks come 2026, which is putting some immediate upward pressure on, for instance, the rate on the 10-year U.S. Treasury.

This is just one reason that if you get a phone call offering mortgage refinancing with “no cost to you,” you should be on high alert.

Taking a step back and looking at mortgage rates over the year, the 30-year fixed rate started 2025 up around 7%. It's down closer to 6.35% at the tail end of the year.

For some homeowners, you might be considering the opportunity to refinance and lock in a cheaper interest rate. But it’s important to exercise caution — it's also an opportunity for bad actors to pitch homeowners something that might cost more than they’d think, especially in the near term.

For more on what to look out for, “Marketplace Morning Report” host David Brancaccio spoke with Jacob Faber, an associate professor of sociology and public service at New York University. The following is an edited transcript of their conversation.

David Brancaccio: One of our reporters shared this story the other day: Her mom received a call from a lender promising her that with lower mortgage rates, she could reduce her monthly mortgage payment and it wasn't going to cost her anything. But sure enough, the mother is now on the hook for the fees associated with refinancing and new terms for the loan. Are you seeing the likes of this out there?

Jacob Faber: Absolutely, we are hearing a lot of kind of reports, of calls like this. You know, it's important to distinguish between outright scams, where people are being lied to by someone claiming to be an underwriter or mortgage rescuer — but that person doesn't actually represent your lender — and real offers from lenders that sound great, but don't end up benefiting the borrower in the end.

Brancaccio: I mean, if it's fraud, it's fraud. But wrapping the cost into a refinancing package is legal. I mean, it's what you would expect at some level.

Faber: That's true. That doesn't mean that it's good for the borrower. So it can be difficult to understand how a homeowner can balance short-term costs of refinancing against medium- and long-term savings of a lower interest rate. And it's always important to remember that your lender's primary incentive is to make profit and not necessarily make the best decision for your specific circumstance. There's never a free lunch. And speaking as someone who has been studying the mortgage industry for well over a decade and buying a home this past summer, it still was hard for me to understand all of the things that were that were going on and were being offered to me in that instance.

Brancaccio: What are some of the warning signs that you look out for when trying to negotiate a complex deal like this?

Faber: Anything that sounds strange or too good to be true. “This is going to cost nothing” is a pretty big flag. People being asked to pay fees up front or cancel their mortgage payments or send them to someone other than who they’ve been sending them to. And anyone who's being too aggressive, putting pressure on you to agree to something, or asserting that something will definitely guarantee a financial return. These are all things we should be worried about.

Brancaccio: If you're sitting there alone, trying to make a huge money decision like this, it might behoove you to get some expert opinion, or some other family opinion, or to talk to at least one other person before agreeing to something.

Faber: I'll also say that Google search will lead you to many useful resources that are provided by state-level governments. There's plenty of advice available for how to avoid these types of scams and how to make the calculation of whether or not refinancing at any particular time is worth it.