I'm not a huge fan of Dave Ramsey's personality, but I do enjoy his money-saving newsletter. Here's one article showing why I've been warning and warning my friends about all this refinancing.

Huge Interest Payments
By Tiffany in GA

We consolidated our mortgage to pay off a couple of credit cards. We were told the interest rate would be 10% for the first year. If we kept our credit good, they would refinance the mortgage with no closing costs after the first year and lower the interest rate.

We had the salesman sign on company letterhead that statement so we would have documentation to hold the company to their word.

After the first year was up, we tried to contact the salesman, and surprise! He just happened not to work there. We could not get out of the mortgage because he wrote it for 125% of the value!

All in all, it took us 4 years to find a company to work with us to get our interest rate lowered. We paid $39,000 in interest over 3 years and only brought the principal down $2,000 over those 3 years.

We definitely learned our lesson!

Unfortunately, many of my friends are getting stung now that the bottom has dropped out on the sub-prime market and their ARMS are beggining to climb. Even worse are those who are doing the "minimum" interest-only payment and will soon discover that neither their pay check nor the equity in their home will keep pace with the soon-to-increase mortgage payment. I hope you're not one of them, but if you are, I will be praying for you!