Most Americans heard about the President Obama's Refinance Program. They heard him tell the country that they were going to be able to refinance their mortgage, even if it was under water. He said that the program was going to save average Americans who pay on time $2-3,000 per year. It sounded great. It seemed that overnight, interest rates dropped to the 4-4.5% range. The country (at least the banking community in the Country) was jubilant! However, when people started to embark on the Refinancing process, they came to realize that it was going to be a very difficult road. Lenders, fearful of refinancing under water mortgages were tightening their guidelines. Consumers were being asked for things that they had never been asked for before when trying to refinance. The process was taking some lenders 90 or 120 days to complete. Mortgage holders were becoming exasperated.

Some homeowners threw in the towel. They decided that the $200 or $300 they would save on a monthly basis was not worth the aggravation that the process was causing. They figured that they would wait to cool down and then restart the process in a few months. However, what most people fail to realize is that this program will not last and neither will these low interest rates! In the last few months, we have seen the 10 Year Bond Yield rise from the low 2% range to 2.9%. This caused interest rates to spike from the low to mid 4-4.5% area to 5-5.5%! Most people now are sitting on the fence waiting for rates to come back.

This is a huge mistake! Interest rates have never been as low as they are now. If you missed out on the 4% rates, you'd better get on board with a 5% rate because that will be gone soon as well. Some people think that it doesn't make sense to refinance unless you reduce your current rate by at least 1 or 2%. Think about this... if you have a $150,000 mortgage at 6% and you refinance even 1/2 point lower to 5.5%, you'll save about $20,000 over the life of your loan.

Another small detail that most people don't realize is that Fannie Mae's HARP Program and Freddie Mac's Open Access Programs are allowing people to refinance properties that are not worth what is owed on them. This means that if you have been waiting and the Programs go away, you will be stuck with whatever interest rate that you have forever. So wouldn't it make sense to refinance at the lowest possible interest rate you can while you can, especially if you are under water?