May 8th, 2012 5:34 PM by Preston Ware
The H.A.R.P 2.0 refinance is a mortgage loan that will help a lot of mortgage holders who own homes that are upside down save money. HARP or the “Home Affordable Refinance Program” is a program that came out in 2009 designed to help two types of mortgage customers. Half of the legislation was designed to help customers who were behind on payments and needed to modify their loan. The other half of the legislation was designed to help good paying customers who had placed 20% down on their mortgage but saw equity slip away due to declining home values.
As a mortgage banker in Florida, I have done my best to help the good paying customers. I also noticed that the original HARP refinance program was lacking because it only allowed customers save money when they were upside down up to 105% loan to value. Based on the huge discounting of home values in Florida, many of my potential customers were quickly ineligible.
Then the HARP limits were pushed to 125%, but still many mortgage customers were left out due to declining home values. Now the good news is that the limits have been taken off completely! Here are some other recent upgrades that will benefit homeowners everywhere.
As I mentioned, recent improvements include eligibility for Fannie Mae/Freddie Mac customers to refinance if they are over 125% loan to value. Lenders are offering an appraisal waiver option that will appear in the automated underwriting feedback of your file. This feedback will help you avoid the cost of an appraisal and simplify the process. Mortgage holders with interest only mortgages or mortgages with mortgage insurance can now utilize this loan as well. Mortgage holders who originally had structured financing with a 1st mortgage and a 2nd mortgage piggy-back can also lower their interest rate. We will subordinate that second although no new seconds mortgages are allowed. Mortgage holders who own a condo have another set of overlays but I encourage you to try. It depends on the property and the strength of the file.
In the feedback of our underwriting, we see that HARP also offers expanded approval options for customers with tarnished credit or shaky job history or lack of reserves. As a rule, a middle score of 620 is needed but I encourage everyone to let us do the work and check the feedback. Rates are in the low to mid 4’s. If you are currently in the upper 5’s or low to mid 6’s, you should probably look at this loan.
All in all, I encourage any mortgage customer with a Fannie Mae or Freddie Mac loan bought before June of 2009 to call a mortgage professional and see if they qualify for this loan. Saving $150-$400 a month for the life of your mortgage has a wonderful effect on the happiness of your family for years to come.