The HARP loan program is underway and going strong
We have been taking applications for those of you who qualify for HARP refinancing of your current mortgage since May 1, 2009.
HARP is the Homeowner Affordability Refinance Program being offered for those homeowners who do not otherwise qualify to refinance their current home loan. Whether you watch the financial news programs such as CNBC or Bloomberg TV, or listen to the local news, I’m sure you’ve heard about government programs aimed at helping those who need help to take advantage of low mortgage rates, but do not qualify. This loan program is a fantastic opportunity for those of you with mortgages owned by either Fannie Mae or Freddie Mac.
If your current loan is owned by either Freddie Mac or Fannie Mae you might be eligible to refinance your home with HARP funds. We have several lenders offering this program NOW. To find out if Fannie or Freddie owns your current mortgage, click on the links below and complete the short online form.
You will get an immediate online response. If you get a no response but believe that could be an error, your current loan servicer has this information, and is required to tell you.
This loan will refinance your 1st mortgage only (if you have a 1st and 2nd mortgage, the 2nd mortgage will remain as it is). We can finance up to 105% of the current value of your home. (You may have heard that HARP loans are available up to 125%, but no lenders are making mortgages that far under water yet). This loan is for those who:
1. are under water - owe more than the house is worth
2. have an interest rate higher than prevailing interest rates
3. have an ARM (adjustable rate mortgage) that has re-set or will re-set shortly
4. want to refinance, but because your house loan to value ratio is now above 80%, will be required to pay mortgage insurance, making the refinance transaction not worth the closing costs. NO MI is required for HARP loans)
5. are not eligible to refinance due to a decrease in monthly income (job layoffs, shorter hours, etc). However, you will need to show that you can carry the new monthly payments.
If your current mortgage payment includes mortgage insurance, or “lender paid mortgage insurance,” I’m sorry but this is another case where lenders are not doing these loans yet, in spite of technically being available. The problem here is that the approval will always come back requiring mortgage insurance, but there are no private mortgage insurers willing to take on this risk.
(Some of you may have Lender paid mortgage insurance and not even realize it. Here's a hint - if your loan IS owned by Fannie or Freddie AND the original loan amount was greater than 80% of the appraised value of your home, AND your monthly payment does not show a private mortgage insurance component, it is almost guaranteed that your loan DOES have lender paid mortgage insurance.) Please feel free to contact me if you aren't sure. I can help you figure it out.
Investment properties were often sold to Fannie or Freddie. If you own investment property, you may be eligible for the HARP loan. However, you may be limited to choosing only ONE loan to refinance through this program.
Some of the great features of this type of refinance transaction are:
- Generally lower closing costs
- Generally more lenient underwriting
- Sometimes no appraisal is required
- The same low rates that conventional loans qualifying for a conventional refinance transaction would get. This includes adjustments for credit score, type of property, etc.)
- If your loan is owned by Freddie Mac, you may not be required to prove income. NOTE: If your loan is owned by Freddie, you will have to do your refinance through your current loan servicer. However, Fannie loans can be done by any lender offering this program.
- NO MORTGAGE INSURANCE (even if you owe more than the house is worth)
- With a Fannie loan, all your closing costs can be included in the mortgage, so, except for a credit report fee and appraisal fee (if required), this loan does not require cash up front.
Remember, the goal of this loan is to reduce your current payments. There is a maximum of $250 Cash out allowed.
It is still possible that current loans with mortgage insurance, and/or loans for up to 125% of the current valuation may become eligible for HARP financing soon, so please keep checking back. I will definitely make that announcement as soon as I hear more.