However, in accordance with HARP guidelines, you cannot combine your two mortgages in a cash-out refinance. To refinance your first mortgage via HARP, but leave your second mortgage unchanged, your second mortgage lender will agree to subordinate its mortgage, which is a fancy way of saying that second mortgage lender will give permission for you to replace the existing first lien on title.
Yes, you can refinance your home via HARP if you have no equity. Via HARP 2. If you were turned down by Wells Fargo, for example, you may be able to get approved by Quicken. Investment properties can be refinanced via HARP, and so can second homes and vacation properties. However, U. This freedom was among the improvements of HARP 2. There are now thousands of lenders making HARP 2. Although HARP ended in , two federally-backed initiatives for high loan-to-value LTV ratio mortgages currently offer homeowners similar benefits with a few changes.
When real estate values fall, homeowners with little equity in their homes can find themselves underwater — owing more on the mortgage than what the home is worth. HARP was created in to give borrowers who were current on their mortgages but had little or negative equity an opportunity to refinance at lower rates.
HARP was modified over the years and eventually enabled homeowners to refinance up to percent of the value of their homes without primary mortgage insurance. There was a slight decrease in the number of homeowners with negative equity as of the fourth quarter of , with only 1. This was a drop of 21 percent from a year ago and down significantly from the peak of 26 percent in Of these loans still underwater, many were likely modified or refinanced through HARP, and are working their way into positive territory.
Today, two federal programs offer a permanent refinance solution for homeowners who are underwater with their mortgages:. They are essentially an extension of HARP, but with different names and slightly different requirements.
They offer benefits including reduced monthly payments, lower interest rates, shorter loan terms and the ability to convert an adjustable rate to a fixed-rate mortgage. To be eligible for these HARP replacement programs, you must have:. There are several key differences between HARP and its replacements. Fannie Mae and Freddie Mac require underwater loans to be at least 15 months old before they can be refinanced.
Both programs require a minimum LTV ratio of You can also contact Fannie Mae or Freddie Mac directly:. Lowering your interest rate and monthly payments not only saves you money, but also enables you to build equity faster. The new programs are only for loans originated on October 1, , or after. Unfortunately, if your loan origination was between the two cutoff dates from June 1, , to September 30, , neither option applies. You don't qualify for either program and are stuck with conventional refinancing paths.
MoneyTips is happy to help you get free mortgage and refinance quotes from top lenders. The replacement programs are similar to HARP, with the same qualification restrictions on delinquent payments but with a few important differences aside from loan origination dates. You can't choose between the two programs. Since the program began, almost 3. Given present conditions, it is estimated that fewer than 38, U.
At the same time, HARP's replacement, the Streamline Refinance program will also run concurrently, starting with loans originated on or after October 1, A HARP loan looks a lot like any other mortgage. There will be loan disclosures to sign and supporting financial documentation to remit. Mortgage lenders are looking for borrowers with solid incomes, good assets and quality credit scores. Here are five ways to prepare for a HARP refinance:. Fannie Mae and Freddie Mac each have a loan lookup tool which allows homeowners to search for their loan:.
In general, this means that your mortgage must have started in mid-May or earlier. You can find your mortgage start date by looking at your closing paperwork. Note: Since it can take up to 60 days to securitize a Fannie Mae or Freddie Mac loan, even if your start date is close to June 1, , you still may be ineligible. The general rule of thumb is that if you have mortgage insurance, your new HARP mortgage must have the same level of coverage. HARP requires that all homeowners have made their last six mortgage payments on time, with a maximum of one day late payment in the past year.
This information is verified against your credit report, so be sure to review your credit reports prior to submitting your HARP application. Since HARP mortgages are underwritten like every other type of mortgage, you will be required to provide bank statements, a driver's license, homeowners insurance information, pay stubs and W-2s. If you're self-employed, you'll have to provide a few years of tax returns to verify your income.
The speed in which you return these items to your lender can dictate your mortgage rate. If you're going to apply, you must follow these tips to be approved and to close as quickly as possible.
You may be able to refinance with another lender. In order to refinance both a first and second mortgage through HARP, you must meet two additional requirements, according to MakingHomeAffordable. The general answer is "yes," you can refinance a property under HARP if it is a rental.
Of course, the loan must still meet all the typical HARP requirements. Since , there have been many changes and updates to the HARP program. Here are some of the most important changes to HARP since the program began:. According to Fannie Mae, they have removed the "requirement that the borrower on the new loan meet the standard waiting period and re-establishment of credit criteria in the Selling Guide following a bankruptcy or foreclosure. The requirement that the original loan must have met the bankruptcy and foreclosure policies in effect at the time the loan was originated is also being removed.
This indicates that you should be eligible. Freddie Mac usually follows the same policies as Fannie Mae, but there may be some differences.
How to refinance when you are self-employed. Use this document check list. Refinance calculator: The best way to finance your refinance. Can I refinance my condo. I am interested in a lower rate then 4. Would the refinance be a disqualifier for the HARP program. I have a Fannie Mae loan from I have never refinanced and my interest rate is 6.
I was told my DTI would be too high and I would be denied. Is this true? Fannie's regulator, the FHFA also noted in their release regarding HARP's eventual replacement [Streamline Refinance] that "but as with HARP, eligible borrowers are not subject to a minimum credit score, there is no maximum debt-to-income ratio or maximum LTV, and an appraisal often will not be required.
Of course you can refinance using HARP into a shorter-term loan. While the greatest cash-flow improvements may come from a re-lengthening of the term to a new 30 years, FHFA encourages borrowers to swap to or year terms with lower risk-based fees than those available on terms of 30 years.
A HARP refi into a less-thanyear term offers faster equity building, considerable interest savings and lower rates and fees. It's hard to argue with that!
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