Re-financing your home: is now the time?

Last Spring, when it came time for these school-teachers to re-finance their adjustable rate loan, the last thing they wanted was a costly lesson.

"Seven o'clock at night you're watching the news. Breaking news and the banks are imploding. And when something like that happens, it gets ya nervous," Marilyn said.

Rates were falling. They grabbed a fixed rate loan at just 4.75%. Little did they know, one of the lowest rates for some time to come.

"I'm thrilled. I'm thrilled. And I feel very fortunate that we decided to make the move at exactly that time," she said.

Just ask their mortgage consultant. Is it still a good time to re-finance?

"Well, it is for some people. And not so much for others." said mortgage consultant Linda Richards with 1st Priority Mortgage in Clifton Park.

That's because, Richards said the economic climate has changed. Banks are stingier about lending. Your credit score and the amount of equity in your home - more scrutinized. Interest rates have been on a roller coaster, from a low of 4.5% for a 30 year fixed, up to a high of 5.875% this year. Recently, they average around five percent.

"There used to be a rule of thumb. If you're saving two percent it made sense. That's not the case for everyone. Because there are different situations for everyone," Richards said.

It was certainly different for Illan Levy, a homeowner in Cherry Plain.

"The answer was 'no.' We tried whatever we could, but unfortunately they were required to accept the one and only appraisal," he said.

Levy and his wife got turned down for a re-finance because of a low appraisal, they said, mistakenly low. It came in 45% lower than just a year before, and they feel that a drop that big couldn't have happened.

They had applied to drop their rate a point-and-a-half to 4.75%, hoping to lower their payment $500 a month. But because of the appraisal, the bank called the deal off.

"The bank called, and this is our current bank, and they said that we'd be unable to write the loan because there's not enough value there to justify the new loan," Levy said.

"For them, for the next six months, they're stuck with that value. Because they're stuck with the appraisal," Richards said.

That's the sting of today's market, you have to fit into just the right financial mold. Whether it's getting in at the right time like the Eranos, or finding the cards are stacked against them, like the Levys, homeowners have to figure out if a re-finance is worth it.