HARP Refinance – Home Affordable Program FAQ #1
There’s a lot of confusion about the HARP 2.0 Refinance program. Your big four bank might tell you one thing and a professionally licensed mortgage lender might tell you another.
Who is right? It depends on your situation, but for the most part your big bank is desperate to keep you. They are not happy that the Home Affordable Refinance has been opened to all mortgage professionals.
Quite frankly, I’m surprised it was. Nearly every change in the mortgage / real estate industry in the past few years has been big bank lobby based. They have done absolutely everything in their power to destroy choice and steer you to them.
In the process they have practically ruined the housing market. Go big 4, much appreciated. The only way to make your product attractive was to attempt to make everyone else suck as bad as you do.
HARP 2.0 opens things up. You are not stuck with your servicer, the ridiculous turn times or there untrained loan officers. They hate that.
What is a HARP 2.0 Refinance?
- The HARP Refinance program is a mortgage refinance program designed to assist underwater homeowner’s with conforming / conventional home mortgages refinance.
- Created in 2009, the original HARP program had too many restrictions. Including adjustments to interest rate for loan to value , LTV caps and limitations to your current mortgage servicer, HARP 1.0 need an overhaul.
How Do I Qualify For a HARP Refinance?
- Your mortgage loan must have been originated before June 1, 2009
- Your loan must be owned or guaranteed by Fannie Mae or Freddie Mac - Not showing up? Fannie and Freddie make mistakes and their HARP search is pretty fickle. We can always call for you. Just let us know.
- No mortgage lates in the past 6 months and only ONE mortgage late payment in the past year.
- Your HARP Refinance must have tangible benefit. Don’t worry about the sharks, if you aren’t meeting the HARP program benefit requirements then you’re not going to get your refinance through underwriting.
My Current Mortgage Lender Says I Need to Use Them for My HARP Refinance. Is That True?
Nope, you can finally dump your bank. HARP 2.0 is available to all mortgage lenders, you can actually use your preferred lender. HARP experts with the right set-up will have multiple outlets. That means that you have options.
With options, you can choose the right combination of interest rate, turn time, closing costs and guidelines that fit YOUR personal situation.
I spent 3 years a big bank. When we did HARP loans, we were REQUIRED to lock for 90 days. We were encourage to wait 30 days into the HARP process before we locked the loan. The average time from application to closing was 120 days.
They didn’t need to provide any level of customer service, you were stuck. You wanted a HARP loan, you needed them.
Now, they are stuck. Now their absurd turn times, loan officers that don’t respond, underwriting whims and overall lack of respect for their customers will result in customers FIRING that mega-bank.
Does a HARP Refinance Have Closing Costs?
People don’t work for free, of course a HARP refinance has closing costs. It’s a mortgage, you need a title agent / closing attorney. People have to process the loan and lenders have to underwrite the loan as well.
You don’t have the money to pay closing costs? Welcome to the economy. Not an issue, you have options.
When you refinance every loan officer should present you with multiple options. You should get a NO COST HARP refinance option, a LOW COST HARP refinance option and a FULL COST HARP refinance option.
As you may know, nothing is actually free. The lower your closing costs the higher your rate. It may only be .25 different then the other Home Affordable Options, but to do a no cost refinance the lender needs to cover the costs via premium pricing. Premium pricing is just a fancy term for using the profit from a higher rate to lender pay closing costs.
Does that mean that a NO COST HARP refinance is a scam? Absolutely not, premium pricing is a common way to price a no cost refinance.
Get a loan officer that provides options, review the options and decide the best option for you.
We are just cracking the surface of HARP 2.0, stay tuned for more FAQ’s and detailed Home Affordable Refinance info!