The new Home Affordable Refinance Program has increase the borrowing limits to 125% of current house values. Homeowners now have an option to borrow more or face foreclosure.
The 125% loan-to-value (LTV) encourages more borrowing from house owners who maybe already be underwater as compared to the original refi programs offered by Fannie Mae or Freddie Mac with a 105% LTV.
http://www.housingwire.com/2009/07/01/hud-expands-home-affordable-refis-to-125-ltv/
Lower interest rates are the best time to refinance, and to get more serious about buying a home. Article does a good job on explaining how the refinancing, and mortgage ecosystem works when interest rates become lower.
http://www.businessreport.com/news/2009/jun/30/taking-plunge-fnc1/
Refinancing mortgages is never easy. You have to explore all the options available to you, and weigh the pro and cons based on cost benefit analysis. Fortunately, you will find a lot of useful information on the internet today.