Just a heads up....
If your current mortgage on your primary residence is an FHA-insured loan, then there is a way to refinance your loan to take advantage of low rates that does not require you to "re-qualify" for the loan nor does it require an appraisal. The appraisal is a key issue since a lot of folks have seen property depreciation and this is the only way that they can actually qualify to refinance their home. This is known as the FHA Streamline Refinance program. FHA recently announced extra refinance incentives for this program that became effective last week such that the new up front mortgage insurance premium is almost non-existent and the monthly MI premium will be approximately the same as the existing loan in most cases rather than the current, much-higher rates.
However, if you think you might qualify, I encourage you to investigate this with a reputable lender ASAP, as this program is most likely going to cease to be available in its current form shortly. The majority of these FHA Streamline Refinance loans are sold to the large banks to long-term service these loans. The large banks are experiencing heartburn complying with reserve requirements under the new BASEL III guidelines which strictly limit the ability to use any loan servicing (regardless of collateral/borrower/loan quality) to meet their reserve requirements. This is creating a shift away from some programs by these large institutions. FHA Streamlines are one such area.
In the past week, nearly every large bank has announced that they will no longer purchase/service any streamline refinances except to refinance the loans already in their portfolio. This means that the banks have the ability to price these loans much higher than current market since they know that you will not be able to go down the street to their competitor and get a better rate. Also, nearly every smaller lender will not have an outlet to sell these loans or will have to sell them to into an outlet which has a higher mark-up.
Bottom line is these loans are getting more expensive and more difficult to get and FAST!
Based on today's market, there's no reason you shouldn't be able to get 3.5% for a new 30-year loan (or 25-year loan) with decent credit (680 FICO) or 3.75% with at least 640 FICO. DO NOT CALL YOUR CURRENT SERVICER IF IT IS A LARGE BANK--THEY WILL NOT BE ABLE TO CLOSE YOU TIMELY AND WILL QUOTE A MUCH HIGHER RATE.
My suggestion is to go to a smaller, FHA-approved lender that can process and close your new loan quickly. You can find a HUD-approved lender here: http://www.hud.gov/ll/code/llslcrit.cfm