With all time low interest rates made available, you would think that more homeowners would take advantage and refinance.  Some do not qualify and others do not want to take on the risk of a new loan.  With home prices declining most borrows are left with almost no equity in their homes and will not benefit from refinancing. 

If people do qualify to refinance they will benefit from the low interest rates.  Reports show that about 37% of homeowners who have 30-year fixed rate mortgage have a 6% or higher interest rate.  Those who are making the new purchases are taking advantage of the low rates, but those who were unfortunate and stuck with high interest rates have not taken the opportunity to refinance and lower their rates.

Homeowners who are trying to get their loans modified might have also gotten their interest rates lowered as well.  Overall, consumers will have saved $3.4 million from all the loans that were refinanced last year.  This is a great boost for the economy; this will put more money in people’s pockets to save and hopefully put back into the economy.

Help is available to borrowers who are underwater on their mortgages.  The government has introduced a program, but not too many individuals are aware or simply are not taking advantage of the program.  For individuals who are extremely underwater may not find it beneficial to refinance. 

Another reason refinancing is not considered an option is due to the high fees some lenders are making mandatory.  The lower your credit the higher the fees become. People with better credit scores are getting the refinancing completed.  Freddie and Fannie have strict credit standards, which is making it almost impossible for someone with anything less than excellent credit to refinance their loans. The high fees are found to be the leading problem for many homeowners decision not to refinance. Some are saying “It just isn’t worth it”.

The Obama administration is working on alternate programs that will benefit more homeowners through the Federal Housing Administration. The results of the program that is set to expire in June, 2010 were not as successful as expected by the Obama administration and lenders.  Programs and work out plans need to be made available for borrowers during these tough economic times.