Don't forget to add state taxes to your transaction. It could add another 1/2 to 1% of the new loan. A drop in the fed rate won't really affect mortgages (unless you have an index to the prime, and the prime rate drops with the fed rate).
Look at the long bonds if you want to know where mortgages are going. This is how GWB really screwed the American people (and I'm not even a liberal). By floating another 800 Billion dollars in national debt, the market demand for long, safe investments has been re-saturated preventing the rates from dropping too much lower. Why buy *-Mae, when you can get US securities. Remember the dip after the 30 year bonds went off the market? Don't forget the 5 Trillion (yes, now greater than half the market capitalization of the entire stock market) in US debt already in the market. Elimiate the national debt, and you just might see mortgages dip below 5%. Now there's a savings you can take to the bank.
Anyway, the rates are good and have been for two months now. I locked at 6.125% for nothing with my current lender two months ago (I close Friday). I paid ~$150 in fees, an appraisal, title insurance, and my closing attorney fee. The taxes were zero on the original amount, because the state of VA sees it as a renegotiation of rate with my current lender, rather than a new mortgage. I even rolled my HELOC (currently at ~3.85% before the Fed cut) into the first - a bump up in rate, but I'll be (net) saving each month on the two combined, and my rate is guaranteed for 30 years.
BTW - my mortgage lender is Chase Manhattan, one of the best out there. I get a statement each month showing the last payment, the principal, interest, and impound amounts, and my remaining balance. They're a breeze to deal with on the phone, too. I spoke to the Blacksburg, VA rep - Dennis Duncan (dennisduncan.com) - one of the best in the business. I believe he does most of southwest Virginia. He's not the lowest rate (but usually close), and doesn't have online rate quotes (you have to call), but he's honest and generally a good guy. He has built up a reputation in and around Blacksburg over many years. His office _is_ very busy, so a little patience is required at times.