How to Get Lower HARP Refinance Rates & Fees

If you’re an underwater homeowner looking to refinance with the Home Affordable Refinance Program there are several things you need to know about HARP Refinance Rates. Just because you’re in a government refinance program doesn’t mean you shouldn’t be comparison shopping for the lowest HARP refinance rates and fees. Here are several tips to help you find the best HARP refinance rates while avoiding lender junk fees and unnecessary discount points.

Find Your Best HARP Refinance Rates

The Home Affordable Refinance Program is the best thing to happen to your underwater mortgage. The problem is that lender participation is voluntary making it extremely difficult to shop for the lowest HARP refinance rates and fees. In fact, most homeowners don’t comparison shop at all, choosing the first lender to approve their HARP mortgage application.

The government built incentives to increase participation in the program that give lenders near free reign when it comes many of the fees you pay at closing. The government does nothing to make sure lenders aren’t fleecing you when it comes to thing like the loan origination fee and discount points.

If you’re only shopping for your mortgage refinance approval and not comparing fees AND refinance rates you will be overpaying for your HARP refinance rates.

Mortgage Refinancing Is All About Fees

Many underwater homeowners are just happy to get an approval and see their payments go down. It doesn’t matter if you’re qualified for a conventional refinance or are in a government refinance program, the test of how good a deal you’re getting comes from the fees you pay.

The longer it takes you to break even recouping your out-of-pocket expenses the less benefit you’re getting from your lower HARP refinance rates. If you’re paying lender junk fees or unnecessary discount points it’s going to take you that much longer to break even.

You can approximate your break-even point by adding up all the fees you’re paying for mortgage loan origination, any discount points and lender fees and dividing by that amount your mortgage payment will go down. This tells you the number of months it’s going to take to start benefiting from your new HARP refinance rates.

Suppose it’s going to cost you $5,000 to close on your HARP refinance and your payment will go down by $250. In this example it will take you 20 months, just under 2 years to break-even. This calculation only works if you keep the same term-length or go shorter with your new home loan. If you refinance a 15-year mortgage with a 30-year term length you’re going to be losing money no matter how low your interest rate.

How To Shop For Better HARP Refinance Rates & Fees

Don’t just settle for HARP approval. It doesn’t matter how underwater you’re are with the new program you can qualify. If your loan-to-value is greater than 125%, chances are you’re going to find lenders that deny your application because of overlays.

Overlays are lender specific rules for approving HARP applications. Many but not all lenders use overlays to reduce their risks from refinancing underwater home loans.

Instead of focusing on getting your HARP application approved focus on the fees found in section 800 of your Good Faith Estimate. If a lender denies your HARP application move on to the next lender.

Community based credit unions are an excellent starting point for finding lower HARP refinance rates and fees. This this government refinance program is excellent for underwater homeowners, just don’t make the mistake of shopping for the approval instead of shopping for the lowest HARP refinance rates and fees.

Click Here For More Details…

You can learn more about paying less for your HARP refinance by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Get My Underground Mortgage Videos
Here’s a quick sample to get you started shopping for lower HARP refinance rates from today’s best mortgage lenders without paying junk fees…

Underwater Mortgage? HARP Refinance Slashes Your Payment By 34%

The Home Affordable Refinance Program (HARP) was designed to help homeowners with underwater mortgage loans qualify for today’s best refinance rates. The program was just revised under HARP 2.0 to get more people qualified. If you were denied when the program first came out or have been putting off refinancing because you think you won’t qualify, HARP 2.0 could lower your payment by an average of 34%. Here’s what you need to know about qualifying for the government refinance program known as HARP 2.0.

HARP is for Underwater Homeowners Like You

Being underwater means you owe more for your mortgage loan than your home is worth. In the past having a loan to value ratio higher than 80% made it difficult, even impossible to qualify for mortgage refinancing. That’s where the Home Affordable Refinance Program comes in.

Much like the FHA streamline refinance or the VA’s Interest Rate Reduction Refinance Loan (IRRRL), HARP removes the requirement for home appraisal and income verification that come with traditional mortgage refinancing. By not requiring an appraisal HARP eliminates the loan to value requirements preventing millions of underwater mortgage holders from qualifying for mortgage refinancing.

This government refinance program also eliminates mortgage insurance for homeowners with less than 20 percent equity making HARP refinancing that much more attractive.

If you’re not paying for Private Mortgage Insurance (PMI) on your existing home loan you won’t be required to pick it up with your HARP refinance.

HARP Government Refinance Program Requirements

The problem with the original Home Affordable Refinance Program is that it was limited to loan to value ratios under 125%. The program was also plagued with lender overlays, lender specific rules limiting their participation in the program. These program overlays often required credit checks and appraisals which defeated the purpose of the program entirely.

President Obama revised the Home Affordable Refinance Program by executive order and HARP 2.0 was born. Gone is the 125% loan to value limit and there are new incentives to reduce risk for lenders and eliminate program overlays.

Here are the government refinance program requirements you need to meet to qualify for your HARP refinance:

  1. Fannie Mae or Freddie Mac must have acquired your mortgage prior to June 1st, 2009
  2. You must have made your last six payments on time and can only have one late payment out of your last 12
  3. Your loan to value ratio must be higher than 80 percent

No matter how far underwater you are in your existing home loan if you meet these requirements you can take advantage of today’s best refinance rates under HARP.

This isn’t to say that program overlays don’t exist with HARP 2.0, you’ll still find lenders playing by their own rules. If one lender denies your HARP 2.0 application and you’re willing to do a little legwork there’s a lender out there willing to approve you.

Beware Lender Fees on Your HARP Refinance

Just because you’re HARP refinance eligible doesn’t mean you don’t have to watch out for closing costs like the loan origination fee and discount points. In fact, part of the incentives included in HARP 2.0 to sweeten the deal for lenders is free reign to charge whatever they like for certain fees.

This is why refinance rate shopping with zero discount point quotes comparing interest rates and fees is so important. Pay close attention to and question the fees found in section 800 of your Good Faith Estimate. Common junk fees include processing fees, application fees and anything resembling a rate lock fee.

The less you pay closing on your HARP refinance the more benefit you’ll get from today’s best refinance rates. The reason fees are so important is that if you’re not able to break even recouping your out-of-pocket expenses because you paid unnecessary discount points or junk fees you’re going to be losing money no matter how low the interest rate.

Click Here For More Details…

You can learn more about getting the best deal on your HARP refinance by avoiding lender junk fees and points by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Underground Mortgage Videos
Here’s a quick sample to get you started refinancing with today’s best mortgage lenders without overpaying…

Which Government Refinance Program?

Do you need help with your home mortgage loan but don’t know which Government Refinance Program is right for you? Asking the government for help feels a lot like going to a rich relative with your hat in your hands; however, it doesn’t have to be that way.

You’re a taxpayer and these programs exist to help YOU so don’t hesitate to take advantage of any program Uncle Sam is willing to offer. The problem is making sense of all the different Government Refinance Program acronyms and qualifying rules.

Figuring out your taxes is bad enough these days…peeling back the layers of bureaucracy surrounding a Government Refinance Program is enough to make you crazy.

Government Refinance Program Red Tape

The main problem with any Government Refinance Program is that they’re not user-friendly. Sorting through qualifying rules for HARP, HAMP, and FHA, VA or USDA Streamline Refinance is like reading income tax code. To make it easier for you to decide which Government Refinance Program is right for you I’ve broken the rules down into three easy to digest segments based on the type of mortgage refinancing you need. I’ve also included resources for getting help once you know which Government Refinance Program is right for you.

Start Here For Government Mortgage Help

Most Government Refinance Program help is geared towards homeowners who are underwater in their existing mortgage and cannot qualify for today’s low refinance rates from the best mortgage lenders based on unfavorable loan-to-value ratios. What does this mean to you? If you owe more than your home is worth then you’re underwater. Anyone with a loan-to-value ratio greater than 80 percent, meaning you have less than 20 percent equity in your home can relate to the difficulty this causes when trying to get a mortgage refinance application approved.

HARP 2.0 If You’re Underwater & Can Afford The Payments

If your loan-to-value ratio is greater than 80 percent AND you can afford your monthly payment HARP 2.0 is the Government Refinance Program for you. HARP 2.0 is the newly revised Home Affordable Refinance Program and was recently overhauled by President Obama. Under the new rules you don’t have to document income to qualify, verify employment, or worry about your loan-to-value numbers. There is a catch to HARP 2.0 and you need to be current on your payments. Also, Fannie Mae or Freddie Mac must have your mortgage loan. You can find out more about qualifying for HARP 2.0 by calling a HUD mortgage specialist at 888-995-HOPE (4673).

HAMP If You Cannot Afford Your Payments

HAMP is not a Government Refinance Program but is a loan modification program. HAMP is the acronym for the Home Affordable Modification Program. If you qualify for HAMP your lender will cut your mortgage payment to 31 percent of your gross monthly income. This would allow you to take advantage of today’s low refinance mortgage rates without taking out a new home loan. The list of qualifying rules for HAMP is a bit longer than HARP 2.0; however, here’s the lowdown:

The mortgage loan in question must be on your primary residence and you must have purchased your home by December 31st, 2008. Your mortgage balance must be less than $729,750 and you’ll have to document income and your bills to qualify. Finally, you cannot have been convicted of a felony related to fraud within the last decade. You can find out more about qualifying for HAMP by contacting the HUD help line at 888-995-HOPE (4673).

FHA & VA Streamline Government Refinance Programs

Lastly, if you have a FHA, VA or USDA home loan you may qualify for streamline refinancing. Many of these programs allow you to qualify for mortgage refinancing without getting an appraisal, verifying employment or documenting income. The main benefit of a streamline refinance is a simpler process to refinancing and reduced fees. You’ll have a choice of 30-year fixed, 15-year fixed refinance rates or Adjustable Rate Mortgage loans.

As with any Government Refinance program there are requirements to meet for a streamline refinance and you need to be current on your payments. FHA streamline refinance applications are handled by lenders so enlisting the help of a good mortgage broker can get you qualified while avoiding unnecessary fees. If you’re a member of a community-based credit union that’s also a good starting point for your mortgage shopping.

If you have a VA or USDA mortgage loan you’ll want to contact those agencies directly to find out more. You can learn more about the VA’s Interest Rate Reduction Refinancing Loan by contacting the Veterans Administration at 1-800-827-1000. If you have a USDA mortgage loan you can reach a Rural Development Staff Member at 1-800-670-6553.

Watch Out for Unnecessary Mortgage Fees

Just because you get into a Government Refinance Program doesn’t mean you don’t have to be on the lookout for lender junk fees or markup. The closing costs you pay including the origination fee or unnecessary discount points reduce the benefit you’re getting from mortgage refinancing. You recoup these out-of-pocket expenses by lowering your payment amount; the more you pay at closing the longer it takes to break even.

Do you have an experience with a Government Refinance Program that you’d like to share? Please leave a comment below…

Click Here For More Details…

You can learn more about getting the best deal for your next home loan regardless of which Government Refinance Program you’re in by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Underground Mortgage Videos
Here’s a quick sample to get you on the right foot with your next home loan…

The Inigo Montoya Guide to HARP 2.0

The Internet is buzzing with HARP 2.0 news and now inconceivably, HARP 3.0. I’ve been getting a lot of questions along the lines of what is HARP 2.0 and how do I get qualified? If you’re underwater in your existing mortgage HARP 2.0 is the break you’ve been waiting for. Here’s everything you need to know about the government’s changes to the Home Affordable Refinance Program (HARP 2.0).

You keep using that word. I do not think it means what you think it means.

-Inigo Montoya, The Princess Bride

What is HARP 2.0?

The Home Affordable Refinance Program is President Obama’s program, recently modified by Executive Order, to help underwater homeowners take advantage of today’s historically low refinance rates. The fact that the new program is now being run under Executive Order is important because HARP 2.0 is not yet law and will expire on December 31st, 2013.

During President Obama’s State of the Union Address, the President pledged to send legislation to Congress making HARP 2.0 law. The changes outlined in the President’s speech are what people commonly called HARP 3.0. If you remember anything from your high school civics class about how a bill becomes a law, it could be a long time before the program is signed into law.

With that being said, let’s start with the original Home Affordable Refinance Program, judged by many as a dismal failure.

The original Home Affordable Refinance Program was part of the American Recovery and Reinvestment Act of 2009. HARP is intended to allow underwater homeowners refinance their home loans but had too many restrictions to help those that needed it most.

The problem with HARP 1.0 was that if your home’s value was less than 25% of what you owed you could not qualify. Basically if you were underwater you could not qualify for the government program to help underwater homeowners. Sounds like our government at work right? Another problem that is still a part of the new program is that your mortgage must be have been purchased by Fannie Mae or Freddie Mac before 2009. If Fannie and Freddie don’t back your home loan you can’t participate in the new program.

How to Qualify for HARP 2.0

The first thing you need to do is find out if Fannie Mae or Freddie Mac has your mortgage. Fannie and Freddie aren’t lenders; they simply buy home loans to create mortgage-backed securities as a means of propping up our battered economy.

If you’re not sure if Fannie or Freddie guarantees your home loan you can reach a HUD mortgage counselor by calling 888-995-HOPE (4673). If your mortgage is not under Fannie or Freddie you will be unable to take part as the program exists today.

There are tools on the Fannie Mae and Freddie Mac websites that you can use to check your status online at:

www.fanniemae.com/loanlookup
www.freddiemac.com/mymortgage

Your home loan must be backed by Fannie Mae or Freddie Mac before May 31st, 2009 to be eligible.

Next, you must be current on all of your payments for the past six months. The program allows for one late payment over the last year; however, you still have to be current for the last six months. If you refinanced under the original Home Affordable Refinance Program (1.0) you cannot take part in HARP 2.0.

Your home’s loan-to-value ratio must also be greater than 80%, meaning you have less than 20% equity in your home to be eligible. If you’re underwater you don’t have to worry about the loan-to-value requirements.

HARP 2.0 Program Improvements

The biggest change under HARP 2.0 is that the 125% loan-to-value limit is gone. If you’re underwater in your existing mortgage and meet the other requirements you qualify. The improved program also allows for automated appraisals meaning you might not have to pay for one. The automated appraisal is faster and much cheaper, paying for a new appraisal could cost you as much as $500.

The new program also allows for some discounted mortgage refinancing fees. This amounts to a nearly two percent savings on standard closing costs due to the elimination of some risk based fees. These fees are limited to $750 per $100,000 refinanced. Some lenders will allow you roll these fees into your loan balance requiring less cash at closing.

The President included incentives intended to increase lender participation in HARP 2.0. Participation is voluntary for lenders, meaning some lenders will choose not to play. (Some may also choose not to approve your application for any number of reasons) The incentives reduce lender liability and allowing pricing flexibility, meaning lenders can charge you a premium for taking on your home loan. This is why shopping around for the best deal is so important under HARP 2.0.

More good news is the elimination of income requirements. This means you don’t have to document your income unless you’re lengthening your loan term. (Going from a 15 year to a 30 year mortgage) This is excellent news for the recently unemployed.

If you’re considering a mortgage refinance under the new program you will not be required to keep your existing lender. Because the fees you pay closing on any home loan make or break the deal you’re getting you’ll want to shop carefully comparing both refinance rates and closing costs before kicking your existing lender to the curb.

Remember that lender participation is voluntary so smaller lenders like community based credit unions may be more willing to approve your application. Individual lenders have the ability to create their own qualifying rules. While there are no minimum credit score requirements, you might find your lender requires a certain credit score to qualify. If you’re having trouble finding a lender to approve your HARP 2.0 application, a good mortgage broker could match you with a lender willing to take on your mortgage.

There are a few other HARP 2.0 rules that you should know about. One thing the program will not do for you is combine your primary and 2nd mortgage loan. If you’re underwater on a second home or investment property you can refinance as the new program is not limited to your primary residence. Lastly, HARP 2.0 does not apply to VA, FHA, or USDA home loans. These agencies have their own programs for underwater mortgage refinancing.

Beware Unnecessary Fees & Markup

One of the incentives under HARP 2.0 intended to boost lender participation is essentially a license to charge whatever the lender likes when it comes to approving your loan. This is why comparison shopping for refinance rates and fees is so important.

If you overpay the loan origination fee or other closing costs it can be difficult, even impossible to recoup your out-of-pocket expenses. If you never break even on your closing costs you’ll be losing money on the new home loan, no matter how low your interest rate.

Click Here For More Details…

You can learn more about getting the best deal on your next home loan by avoiding unnecessary fees by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Underground Mortgage Videos
Here’s a quick sample to get you started finding the best mortgage lender for your next home loan without paying junk fees…

The New HARP Program

Are you underwater in your existing mortgage and haven’t been able to take advantage of low refinance rates offered by today’s best mortgage lenders? The Home Affordable Refinance Program was judged a failure because of its restrictive loan-to-value ratio requirements; however, new rules created by President Obama’s executive order have gone into effect and you might want to give HARP a second look. Here are the basics you need to know about HARP 2.0 that could save you thousands of dollars getting you qualified for mortgage refinancing.

New Rules Changed for the Better

HARP 2.0 has been rolled out for several months now; however, HUD recently automated the process for lenders. Under the old systems underwriting had to be processed manually bogging underwater homeowners down in unnecessary red tape. New software and easy qualifying should allow millions of underwater homeowners to qualify for low mortgage refinance rates previously out of reach.

Under the new HARP program the value of your home doesn’t matter. It doesn’t matter how underwater you are. The old HARP program had a restrictive 125% loan-to-value limit. This meant the amount you owe could not be more than 125% of the value of your home. The new rules eliminate loan-to-value from the equation completely.

The new HARP program may also not require you to pay for an appraisal. The new underwriting process allows for automated appraisals. If the lender you’re working with allows automated appraisals they will estimate your home’s value electronically not requiring you to pay for a new appraisal. Since there is no loan-to-value requirement under the new HARP program the current market value of your home is not an issue. This is good news because paying for a new appraisal could cost you as much as $500. This is an expense lenders are not willing to waive.

New HARP Program Fees Reduced or Waived

If you choose to refinance your home with a term-length less than twenty years Freddie Mac and Fannie Mae will waive their delivery fees on your new home loan. Term length is the amount of time you have to repay the mortgage and along with your refinance rates determines your monthly payment. These fees are being waived to encourage mortgage refinancing with home loans that build equity at an accelerated rate to help get you right-side-up in your new home loan.

Lender fees for high-risk homeowners have also been discounted. Because the refinance mortgage rates you qualify for are risk based being underwater will result in paying higher interest rates than if you were right-side-up. The rules limit risk-based price adjustments to keep mortgage refinancing beneficial for underwater homeowners. This means you’ll qualify for refinance rates close to what the top mortgage companies like Amerisave and Navy Federal Credit Union are offering.

Less Risk For Lenders Too

HARP 2.0 offers incentives for lenders to participate. The government does this by not holding lenders accountable for losses from the underwater mortgage. Lender participation is voluntary so the government has attempted to sweeten the deal for lenders to encourage them to participate. Because it is voluntary for lenders you may encounter lenders not participating or unwilling to approve your application. If this happens don’t get discouraged; simply move on to the next lender until you find one willing to approve your mortgage refinancing.

Under the new rules you’re not required to stick with your old lender. Because there are fees associated with any refinance mortgage loan it will be in your best interest to shop around for the best deal. You may even find your current unwilling to approve your application under HARP. Remember participation is voluntary for lenders and some banks have said they will only approve applications for their existing customers.

The New HARP Program Rules

There are several HARP requirements that did not change under the new program. The biggest roadblock you’re likely to encounter is that your current home loan must be backed by Freddie Mac or Fannie Mae. If they don’t have your mortgage then you’re done…HARP is not an option for you. HARP is a government program that requires government backing of your mortgage in case of default.

In addition to the Fannie/Freddie requirement the government must have acquired your home loan before 6/1/2009. If Fannie and Freddie back your mortgage you must also be current on your payments for the past six months and can have only one late payment during the six months before this period. Qualifying is time-sensitive and eligibility will close December 31st, 2013 so if you qualify, don’t procrastinate.

Click Here For More Details…

You can learn more about getting today’s lowest refinance rates while avoiding unnecessary points and fees with or without the new HARP program by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Underground Mortgage Videos
Here’s a quick sample to show you how avoiding unnecessary fees like discount points can save you thousands of dollars…