Commencing on November 15, 2011 FHFA, Fannie Mae and Freddie Mac introduced major changes to the Home Affordable Refinance Program (HARP). In an effort to attract more eligible borrowers who can benefit from refinancing their home mortgage. This program is a major effort to assist homeowners to refinance to historic low mortgage rates EVEN WHEN THE VALUE OF THEIR HOME HAS DECREASED SUBSTANTIALLY OVER THE PAST FEW YEARS.
“With home prices as low at they were a decade ago and mortgage rates at historic lows, now is the time to consider this incredible option”. Brad Rosley, CFP® FFG Brochure
WHAT IS THE NEW EXPANDED HARP PROGRAM?
In 2009 the current administration rolled out HARP to refinance borrowers whose loans were owned or guaranteed by Fannie Mae and Freddie Mac and who were current on their payments. The idea was simple: If you were making your payments on time but didn’t have enough equity to refinance, you would be able to lower your rate without having to pay down your mortgage balance or take out mortgage insurance.
HOW WILL THIS CHANGE HELP BORROWERS?
This will streamline the refinance process ELIMINATING THE NEED in many cases for borrowers to obtain APPRAISALS. Borrowers must be current on their mortgage at the time of refinance, with no late payments in the last six months and no more than one late payment in the past 12 months. Their current loan-to-value ratio must be greater than 80%, document they have a job or another source of income, and that they meet other criteria for HARP.
Real Story – Benefits of the HARP program in action:
In 2007 we had a borrower purchase their home for 400K. They put 20% down leaving a balance of 320K @ 5.75%. The monthly principal and interest payment on this loan was $1867.43. In 2010 they wanted to take advantage of the low interest rates and refinance. After paying for an appraisal they learned that the value of their home decreased significantly and the new appraised value was 300K. At nearly 100% loan to value the opportunity to refinance at the current loan amount was eliminated. The only option was to pay down the principal balance below 80% which didn’t make financial sense at the time.
We contacted this borrower after HARP was rolled out and determined that they qualified under these new guidelines. There was NO APPRAISAL needed and within 30 days we closed their loan. The new 30 year loan at 3.875% and ZERO closing costs saved them $476 per month.
To find out if you qualify for this new expanded program and REDUCE YOUR CURRENT INTEREST RATE please contact me at the numbers listed below.
Bridgeview Bank Mortgage Company, LLC
100 W. 22nd Street, Suite 109
Lombard, IL 60148