There is no question that refinancing a home today is still possible despite the many changes to lending guidelines.  Having said that however, the changes have affected those borrowers within the range of credit scores between 560 to 649.

It used to be a lender would allow refinancing up to 95% of the value of the home ( LTV), even with some explainable bruised credit.  Today, most lenders have changed their guidelines and will only consider borrowers with a minimum score of 600.  At 600, it is still not certain it will qualify.  Some lenders may only look at a mininum score of 650.  The insurers have also changed their guidelines.  Depending on the credit scores, they may cut back the refinancing amount from 95% to between 85%-90%.   These changes may make some refinancing situations not work for the borrower, who may be seeking to consolidate a 1st and 2nd mortgage, and other consumer debt.  The lower lending values may not provide enought funds to pay out all the creditors.

Borrwers whose credit scores are 650 and above may still qualify to the upper 95% LTV level, provided they are not self employed ( in which case, it may be cut back to 90%LTV).

Certainly these changes will have a great impact on the real estate market sooner or later.  Borrowers who are finding themselves squeezed by mortgage payments and other retail consumer debts, may end up further deteriorating their credit, to the point they may never requalify.  It is important for these people to contact  their creditors and explain their situations, perhaps making other repayment arrangements.

Our econonmy will improve eventually.  We all know markets are cyclical but sooner or later we will begin to see some positive changes.  Slowly the guidelines will be stretched allowing more people to qualify. 

It is ironic that thos who may not qualify today because of tighter guidelines, find themselves not qualifying because the same guidelines that allowed them to borrow before, have now be shut down.