Is now the right time to refi? Maybe, mortgages rates are around 5%, or so, for a 30 year fixed rate loan and less for a new adjustable, if you can find it.  (Wells Fargo seems to be doing them... today anyway.)  The best refi deals are for those who (1) have a loan limit below $600,000, or whatever the conforming rate is in their area. (2) You should have 20% equity minimum, plus a credit score of over 700 and plan on staying in your home for a while, since it usually takes over a year to break even because of the cost of the refi. (3)  You need to be able to actually "qualify" for your new loan. This includes your income and assets and they will be verified. No more "stated income" loans.  It's a catch 22 because if you need to refi to lower your payments, so you can afford the payment, you might not quality for the new loan.  The government does have a new program for those who have no late payments for the last 12 months, to help them renegotiate with their current loan company to accept less than is owed. Then the original loan is paid off and a new "downsized" loan is funded at a lower rate.  It's complicated, but worth the hassle. Call Fannie Mae at 1-800-732-6643, or Freddie Mac at 1-800-373-3343, or go to www.freddiemac.com/avoidforeclosure.