My husband and I refinanced our mortgage several years ago in the heyday of real estate.  We bought our current home in 2003, then watched - amazed - as the value went up by $40,000 in just two years.  We thought, “Let’s refinance for the value and pay off our car and credit card!”

Bad move.  Our home is now worth only about $10,000 more than our original purchase price - only because we also added a sun room.  So in essence, we are about $50,000 underwater because we jumped right in the middle of the feeding frenzy of property values increasing like white lightning.  Hindsight… yea yea…

So is refinancing a good idea?  For us - even though we could decrease our interest rate from a 6.5 to a 4.5 percent rate - we can’t do it because the house won’t appraise for the refinance.  For others, it may still be a good option according to cashmoneylife.  Some of the reasons to refinance:

• Your credit score has improved.
• Mortgage interest rates increasing.
• Have trouble making your payments each month.
• Need to consolidate other debts.
• Making more money.

Again, proceed with caution if you decide to refinance, but the good news is if you bought your house before 2007, you are probably in good shape not getting in upside down.  Good luck!