Jennifer Panganiban watched the charts all year, from the January lows through the highs of July. A week ago she and her husband pounced, locking in a 30-year mortgage at 5.875 percent.

They were refinancing their old loan – and grabbing a moment when a Wall Street crisis became Main Street's gain.

"It all happened really fast," said Panganiban, who lives in El Dorado Hills.

The refinancing wave is on. Prompted by the financial chaos on Wall Street and the move by investors to the kind of bonds that fund mortgages, rates have plunged fast the past two weeks. But here's the bad news: Those in need most of refinancing probably can't. Credit standards are tight, locking out all but the most qualified borrowers.

"Credit standards are getting higher all the time," said William Martin, chief executive officer of the Bank of Sacramento. Martin said many lenders have taken such big losses on mortgages that they simply have less money to loan.

The dramatic drop in values over the past two years also means it will be difficult for many borrowers who now owe more than their homes are worth to refinance.

"For every one we're accepting we're having to turn away two because there's not sufficient equity for the property," said Brent Wilson, a mortgage strategist with Sacramento's Comstock Mortgage.

Yet many of those who can qualify are making their move. Figures released Wednesday by the Mortgage Bankers Association show the refinance share of mortgage applications soared last week to 51.6 percent. That was up from 36.3 percent the week before, which also was up from the previous week.

At the height of the refinancing boom in early 2003, almost 80 percent of mortgage applications were for refinancing, according to mortgage giant Freddie Mac.

Low rates have prompted some brokers to warn against a likely tide of phone calls offering refinance options, a factor that led to many of today's problem loans.

"My word of advice: be careful," Wilson said. "Conduct a break-even analysis and make sure you're going to live in the house long enough."

Rates have fallen nearly a full percentage point in the past two months, down from an average of 6.63 percent in July. More than half that plunge has occurred in the past two weeks after the federal takeover of Fannie Mae and Freddie Mac and the implosion of New York investment banker Lehman Bros.

"In my 17 years I haven't seen such a fast move. Thirty-year rates with no points in the high 5 range," said Bob Walters, chief economist of Michigan-based Quicken Loans. "We've seen our (refinance) volume triple in the past week."

Wilson said most of his refinance clients are already in fixed-rate loans. He said refinancing makes sense for a client with an interest rate in the middle 6 percent range and a loan of more than $300,000.

The difference between 6.5 percent and 5.75 percent on a $300,000 mortgage is about $135 a month over 30 years.

Wilson said the rates that came out Tuesday "were probably the lowest since April." On Wednesday, financial Web site Bankrate.com showed 30-year fixed rate loans averaging 5.73 percent nationally. Fifteen-year fixed mortgages averaged 5.40 percent.

Last week, Freddie Mac reported 30-year fixed rate loans at 5.93 percent.

Interest rates for home equity lines of credit, the majority of home equity borrowing, are not seeing the same kind of declines.

Interest rates can fluctuate daily, even hourly on a variety of factors, including fear of inflation and global economic conditions.

Some mortgage brokers believe rates will hover in their current range for some time, and possibly even improve.

"I don't think we'll see the best rates until the spring," said Michael McGee, president of Winchester McGee Real Estate & Loans in Rancho Cordova. "There's a lot of money moving into mortgage-backed securities."

Quicken's Walters said that "abject fear" is likely to keep rates low for a while.

"As the world frets about the next shoe dropping, investors move out of equities and uncertain bonds and into the most certain bonds," he said. "Now that Fannie Mae and Freddie Mac are backed by Uncle Sam, they're safe bonds. The world is moving into those bonds and that's what's taking those rates down."

For the Panganibans in El Dorado Hills, the chaos in the financial world has offered a silver lining. Their old mortgage was a 6.25 percent interest-only loan they took out when they bought the house 18 months ago.

"Our payments go up by $100 a month, but we'll be paying down principal now," said Jennifer Panganiban. "We're really happy."

Call The Bee's Jim Wasserman, (916) 321-1102. Read his blog on real estate, Home Front, at www.sacbee.com/blogs.