Updates added to this blog 4/13/2012
The newly released HARP 2.0 (Home Affordable Refinance Program) is now available to the public for those who have conforming mortgages owned by either Fannie Mae or Freddie Mac (click on either to see if they own your mortgage)
The Good:
This newly revised program is designed for those who have continued to make their house payments on time even though the value of the home has dropped to a point that traditional refinancing is no longer an option. So it does not matter how much you owe vs. what your home is valued at to refinance into todays low interest rates. You can even refinance if you currently have mortgage insurance on your loan. If you do have MI then the current MI premium would be the same on the new lower rate loan payment.
If you have a second mortgage you can still take advantage of the HARP 2.0 program but the existing second mortgage must be re-subordinated (meaning that lender must agree to stay in 2nd lien position) so that 2nd mortgage payment will continue as it is now. The HARP program will only allow you to refinance the existing first mortgage.
This program will even allow you to refinance your investment property(s)
No appraisal is required, lender provides an appraisal waiver or performs a AVM (Automated Value Model) to determine the homes current value, but since there is no restriction on LTV (loan to Value) it does not matter how high the LTV ends up being, heck you could get approved with a LTV at 165% with this program.
Pricing from Fannie Mae or Freddie Mac is based on several factors. If your loan is over >125% LTV and when you have a 2nd mortgage called CLTV (combined loan to value)a small hit to pricing will effect your loans final rate pricing. In addition all files are run through an automated underwriting system and depending on your credit scores and DTI (debt to income) the lender receives tiered approval that can also effect pricing. "Best to apply for actual pricing of your new loan"
The Bad:
Many lenders have added secondary market overlays to the HARP program that require additional conditions that HARP guidelines do not ask for, like setting maximum LTV (loan to value) restrictions on what they will approve, which defeats the purpose of helping the homeowner. The only way they waive this condition is if they are the current mortgage servicer of your mortgage. “Which really means they do not want to assist those outside of their current loan servicing pool of loans”
Other added conditions are also making it frustrating for some qualified applicants if they end up working with the wrong lender. At Sound Mortgage, Inc. we provide a true HARP refinance option with no secondary market overlays (conditions) that Fannie Mae or Freddie Mac do not require.
The Ugly:
To be eligible for this program your mortgage must have been delivered to Fannie Mae or Freddie Mac prior to June 1st 2009. If your loan was not before this date then the HARP 2.0 program has left you out at this time. “Not to say they will not open it up to loans they received at a later date sometime in the future”
No 60 day late payments in the past 12 months. Even though the HARP 2.0 does not require a min. credit score, you will need to have a min. score of 620 to get the automated underwriting system to approve your refinance and since rate pricing is credit score driven, the lower scores will make your final interest rate higher. (If credit scores are lower than 620, it may be possible to still get approved through manual underwriting)
Here are a few documentation items you will need to provide your lender to get your loan file approved:
• Loan Application (on-line application here)
• Salary/hourly/bonus: One pay-stub
• Commission/self-employed: One-year (2011)federal tax return
• Current bank statements for assets shown on loan application
• Current copy of your first (and if applicable) second mortgage statement(s)
• Homeowner’s insurance information
• Photo ID – Drivers license and SSI card or passport (two pieces of ID required per Patriot Act)
Previous blog post back in October 2011, you can find many Frequently Asked Questions about the new HARP 2.0
The newly released HARP 2.0 (Home Affordable Refinance Program) is now available to the public for those who have conforming mortgages owned by either Fannie Mae or Freddie Mac (click on either to see if they own your mortgage)
The Good:
This newly revised program is designed for those who have continued to make their house payments on time even though the value of the home has dropped to a point that traditional refinancing is no longer an option. So it does not matter how much you owe vs. what your home is valued at to refinance into todays low interest rates. You can even refinance if you currently have mortgage insurance on your loan. If you do have MI then the current MI premium would be the same on the new lower rate loan payment.
If you have a second mortgage you can still take advantage of the HARP 2.0 program but the existing second mortgage must be re-subordinated (meaning that lender must agree to stay in 2nd lien position) so that 2nd mortgage payment will continue as it is now. The HARP program will only allow you to refinance the existing first mortgage.
This program will even allow you to refinance your investment property(s)
No appraisal is required, lender provides an appraisal waiver or performs a AVM (Automated Value Model) to determine the homes current value, but since there is no restriction on LTV (loan to Value) it does not matter how high the LTV ends up being, heck you could get approved with a LTV at 165% with this program.
Pricing from Fannie Mae or Freddie Mac is based on several factors. If your loan is over >125% LTV and when you have a 2nd mortgage called CLTV (combined loan to value)a small hit to pricing will effect your loans final rate pricing. In addition all files are run through an automated underwriting system and depending on your credit scores and DTI (debt to income) the lender receives tiered approval that can also effect pricing. "Best to apply for actual pricing of your new loan"
The Bad:
Many lenders have added secondary market overlays to the HARP program that require additional conditions that HARP guidelines do not ask for, like setting maximum LTV (loan to value) restrictions on what they will approve, which defeats the purpose of helping the homeowner. The only way they waive this condition is if they are the current mortgage servicer of your mortgage. “Which really means they do not want to assist those outside of their current loan servicing pool of loans”
Other added conditions are also making it frustrating for some qualified applicants if they end up working with the wrong lender. At Sound Mortgage, Inc. we provide a true HARP refinance option with no secondary market overlays (conditions) that Fannie Mae or Freddie Mac do not require.
The Ugly:
To be eligible for this program your mortgage must have been delivered to Fannie Mae or Freddie Mac prior to June 1st 2009. If your loan was not before this date then the HARP 2.0 program has left you out at this time. “Not to say they will not open it up to loans they received at a later date sometime in the future”
No 60 day late payments in the past 12 months. Even though the HARP 2.0 does not require a min. credit score, you will need to have a min. score of 620 to get the automated underwriting system to approve your refinance and since rate pricing is credit score driven, the lower scores will make your final interest rate higher. (If credit scores are lower than 620, it may be possible to still get approved through manual underwriting)
Here are a few documentation items you will need to provide your lender to get your loan file approved:
• Loan Application (on-line application here)
• Salary/hourly/bonus: One pay-stub
• Commission/self-employed: One-year (2011)federal tax return
• Current bank statements for assets shown on loan application
• Current copy of your first (and if applicable) second mortgage statement(s)
• Homeowner’s insurance information
• Photo ID – Drivers license and SSI card or passport (two pieces of ID required per Patriot Act)
Previous blog post back in October 2011, you can find many Frequently Asked Questions about the new HARP 2.0
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