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.

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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
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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…