Bracing for a property-tax increase expected to boost their monthly payments by $300, Ellen and Robert Bachner figured refinancing their loan to take advantage of historically low interest rates would save them some cash.

And it worked. On Thursday, the Bachners closed on a 20-year mortgage with a lower -- 4.375 percent -- interest rate that kept their monthly payment on their Lombard split-level house at $1,370 a month.

"We didn't refinance because of a hardship," Ellen Bachner said. "If it didn't work, we would have been OK. But we wanted to keep the payment the same. We were about six years into a 20-year mortgage and, now we've extended it back to 20 years. Our goal was to have the mortgage paid off by the time our oldest hits college. Now, we'll be a couple years behind her, but, other than that, it won't affect us at all."

They should consider themselves fortunate, experts say.

The percentage of people seeking mortgage refinancing who make it to the closing table has fallen dramatically in recent months and it will probably get even worse, said Jeri Lynn Fox, president of the Illinois Association of Mortgage Professionals. Before the real estate market collapsed in 2008, Fox said, nearly 80 percent of homeowners looking to refinance were successful. These days, some mortgage brokers are reporting about six out of 10 refinance deals fail.

"It's difficult for a variety of reasons," Fox said. "And declining property values are probably at the top of the list."

Real estate appraiser Sam Ant-kiewicz, of American Valuation Group in Lansing, said the declining housing market has forced appraisers to be even more diligent in setting property values.

"Five years ago, the strings were loose on comparable properties that we could use," Antkiewicz said. "Now, it's not what we think the value of a house is; it's what we can support. We have to have at least two comparable properties sold in the last 90 days. If only a few homes have sold and it's no good for you, we can't pull a rabbit out of our hat."

And because property appraisals are required for mortgage refinancing, people who keep up with their mortgage payments but have been hit hard by falling real estate prices often can't get refinancing.

The Bachners, who bought their house in 1997, made biweekly mortgage payments that helped them build the equity that made refinancing at a lower interest rate possible.

For other homeowners, though, the steep drop in property values has gobbled up equity and left them unable to modify their mortgages.

"There are good borrowers out there who cannot always meet the exceedingly high standards that are being required," Fox said. "The qualifying income for refinancing has changed. Minimum credit scores are up."

And, in October, the amount that the Federal Housing Authority is going to charge for mortgage insurance -- required for people who borrow more than 80 percent of their property value -- is going to double.

"People would like to take advantage of these historically low interest rates but can't because the guidelines have tightened so much," Fox said. "The learning curve in life is making mistakes and making corrections. We have made huge mistakes, and we are over-correcting."

And what's happening now, Fox said, is that some people are so traumatized by what they've heard that they're not even trying to get a better deal.

"I want to tell them that, yes, it is worth a try," she said. "Median home prices are creeping up. . . . Don't get discouraged."

Ellen Bachner agrees.

"I see how people can get discouraged with what they hear on the news," she said. "I'm happy we did it. And if someone thinks they get their mortgage payment lower by a few hundred bucks a month because the rates are so low. I say try it, absolutely."