How To Reduce Your Remaining Mortgage Years Via Refinance To Lower Mortgage Rates

Mortgage rates are at a 12-month low. It's a terrific time to refinance. But what if you don't want to reset your loan to 30 years?

The good news is that you don't have to. With a little bit of savvy, you can take advantage of today's mortgage rates and shorten the number of years remaining on your loan. It all comes down to a financial term known as amortization (ah-mor-ti-ZAY-shun).

Amortization (ah-mor-ti-ZAY-shun) is the schedule by which your loan balance goes to $0 over time; and it can be manipulated for your benefit. You're the homeowner, and you're in control.

Click here to skip to today's mortgage rates.

A 30-Year Mortgage Schedule Favors Your Bank

When a bank sets your monthly principal + interest mortgage payment, it's based on the principles of amortization. With a mortgage, amortization tends to favor the bank -- the early years of a home loan are very heavy on interest payments and very low on principal.

If you've ever looked at your mortgage statement after a few years and thought, "I haven't paid this thing down a bit!", it's because of amortization. This is true for all fixed loan types, too, including the 15-year fixed-rate mortgage; a 20-year fixed-rate mortgage; and, the 30-year fixed-rate mortgage.

For example, look at these numbers on a fixed-rate amortization schedule.

If you were to borrow $300,000 from the bank at a mortgage rate of 4%, after 10 years, here is how much you would still owe given various mortgage products :

• A 15-year mortgage has $123,000 remaining of the original loan balance
• A 20-year mortgage has $180,000 remaining of the original loan balance
• A 30-year mortgage has $237,000 remaining of the original loan balance

With the 15-year home loan, you would have made a significant dent in the original loan balance. With the 30-year mortgage, by contrast, you've barely paid down anything at all.

At 4 percent, it takes 19 years, 4 months to pay a 30-year mortgage to pay down by half. This is decidedly bank-friendly.

It's also one reason why 15-year mortgages are so popular -- homeowners with 15-year loan pay much less mortgage interest over time as compared to homeowners with 30-year loans or 20-year loans.

Click to compare today's live mortgage rates.

You're Not Stuck With A 30-Year Fixed Rate Mortgage

The good news is that you're not "stuck" with a 30-year mortgage and its high costs of interest -- especially with current mortgage rates are as low as they are today.

Your first option to save on mortgage interest is to refinance into a new, shorter loan term.

If your initial mortgage was a 30-year fixed rate mortgage, for example, you can choose to lower your term to, say, 20 years or 15 years. Reducing the number of years in your mortgage "accelerates" your amortization and the loan pays off quicker.

When you switch to a shorter loan term, you also get avoid "starting your mortgage over" for another 30 years. You get a new loan, with a shorter term. You'll save big on your long-term interest costs.

At today's mortgage rates, homeowners using a 15-year mortgage will pay 65% less interest than homeowners using a thirty.

However, payments on a 15-year mortgage can be substantially higher as compared to longer-lengthed loans. This is because you're compressing the repayment period into a lesser number of years.

With a 15-year mortgage, your monthly mortgage obligation may jump as much as forty percent. For many U.S. households, that kind of increase can be too much to stomach. This is why some homeowners skip the refinance and opt to "prepay" their mortgage instead.

To prepay your mortgage means to send "extra" payments to your lender each month, chipping away at the amount you owe faster than your amortization schedule prescribes.

For example, if your mortgage payment is $1,750 per month, and you send $2,000 to your lender, you've reduced your amount owed by $250. 

Prepaying a mortgage shorten your loan term because the loan's balance will get to zero more quickly. The more you prepay, the more money you'll save.

Also, you can prepay nearly all mortgages with penalty. Government-backed mortgages -- which includes all FHA loans, VA loans, USDA loans and conventional loans -- come with no prepayment penalty ever.  

Click for today's live mortgage rates.

"Refinance-To-Prepay" On Your Mortgage

There's a third way to reduce your mortgage interest paid. It's called "refinance-to-prepay".

Refinance-to-prepay is exactly what it sounds like -- you refinance to a lower rate and prepay on your loan. It's a plan that can give the best of both options -- access to today's low mortgage rates, plus a quicker amortization schedule.

Here's how to refinance-to-prepay, and save in interest costs :

1. Refinance to a lower rate on your same mortgage program (e.g. 30-year fixed)
2. Take your monthly savings and apply it to your new loan monthly as "extra payment"
3. Stay on plan until your loan is paid in full

The refinance-to-prepay system works because, although your mortgage rate is lower, you're making the same payment to the bank each month. There's less interest being paid at the same time that you're "accelerating" your loan payback.

With refinance-to-prepay, you can "restart" your loan to 30 years but then pay it off faster than if you had never refinanced at all. It's a trick of math that plays on bank amortization schedules.

Here's a real life example of how refinance-to-prepay can work.

Say your current loan balance is $400,000 and you're refinancing from the 4.75% mortgage rate you took two years ago to a zero-closing cost 4.00% mortgage rate available today. With the refinance, your payment drops $246 per month so you take that $246 and send it to your lender along with your "regular" payment.

By prepaying your mortgage principal in this way, your "new" 30-year loan will pay off in full in just 24 years --  four years faster than if you hadn't refinanced at all. Those four years of "no payments" save $90,000.

Now, this example assumed a zero-closing cost mortgage at 4.00 percent. Even with closing costs, the maths works out. You're spending a little, and saving a lot.

Refinance Without "Losing Years"

With mortgage rates at 12-month lows, it's a good time to refinance. There are hundreds of billions of outstanding U.S. mortgages with rates over 5%. Opportunities are big today -- and you can refinance without "losing years" on your mortgage.

Compare today's low rates to your existing mortgage. See how many years -- and how much interest -- you can save off your mortgage. Rates are available online at no cost, with no obligation to proceed, and with no social security number required to get started.

Click to get today's live rates. 

Contact The Mortgage Mark with any questions!!   www.themortgagemark.com  

mark@themortgagemark.com  

THE 10 COMMANDMENTS WHEN APPLYING FOR A MORTGAGE LOAN

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Many individuals do not realize that even the slightest change in your financial situation after you apply for a mortgage can delay or ultimately jeopardize the approval of your loan.

In my experience as a loan officer, I have seen each and every one of these commandments broken.  Unfortunately, some of those had the judge (I mean the underwriter) come down upon them, resulting in their loan being denied.

If you’re going through (or about to start) the mortgage application process, please take each of these ten commandments to heart.

1. Thou shalt not change jobs, becoming self-employed, or quit your job.This probably goes without saying, but any change in employment can cause a major issue in the approval of your loan.  This can even mean a change in your job position or type of pay at the same employer (i.e. from hourly pay to commission pay).  While it may be an ‘upward’ move with more potential income, it may just derail your loan.
   Hint: Just stay put ’til you’ve completed your closing.
2. Thou shalt not buy a car, truck, van, motorcycle, ATV, or any other vehicle.In most cases, buying a new vehicle involves numerous credit inquiries, a new loan that must have the new terms verified, and if it’s a trade in, sometimes it takes weeks for the old loan to be paid off.  And unless you qualify with both of these payments, then this may just delay your loan closing.
   Hint: Don’t buy a new vehicle, or you may be living in it.
3. Thou shalt not use your credit cards excessively or let ANY of your payments fall behind.
   Current regulations require lenders to not just check your credit at the initial application, but also at closing.  This is done to confirm there have been no major changes in you debts.  If you had a $100 balance with a $10 minimum payment on that Wal-Mart credit card, but now you’ve went out and purchased new patio furniture, some area rugs, and that new 70″ flat screen TV and now you owe $1500 with a $100 minimum payment, that could be enough to cause your file to have to go back to an underwriter for approval, or worse, your file could be denied.
   Hint: Don’t make any changes in the normal use of your credit cards and do NOT forget to make the minimum required payments.
4. Thou shalt not spend the money you have set aside for downpayment or closing costs.I mean, does this really need to be said?  Unfortunately, yes.  I’ve seen it happen.
   Hint: Your assets required for closing will be verified and scrutinized during the approval process.  Be prepared to explain and document large deposits that are not normal paycheck deposits.
5. Thou shalt not buy furniture, appliances, or household items before you buyer your new home.This goes a lot back to #3 and #4.  Sometimes even the slightest change in your assets or debt load could delay or derail your closing.
   Hint: You can do without that new bedroom suit or refrigerator for just a few more days…you’ve made it this long, right?
6. Thou shalt not originate or allow new inquiries on your credit report.As I explained on #3, your lender will likely re-check your credit the day of your closing.  Any and all new inquiries will have to be explained and sometimes even verified by the creditor themselves to prove in fact no new accounts were opened.  Sometimes you’ll need an inquiry to obtain homeowners insurance or possibly set up accounts with a local utility company or satellite provider, but these types are easily explained.  However, any inquiries associated with credit cards, automobiles, and especially mortgage inquires, must be explained.
   Hint: Be very cautious with any inquiries or be very prepared to delay your closing a few days.
7. Thou shalt not make any large OR ‘cash only’ deposits into your bank accounts or transfer money between accounts.I’ll continue that statement by adding “without first consulting your loan officer.”  Honestly, every lender has a different way of handling these types of non-payroll deposits.  Ours rule, for example, is anything over $500 that is not a direct deposit or payroll related must be explained, sourced, and documented.  And depositing cash is a NO-NO!  We will review at least the past 60 days of account history on your bank statements.  Let’s say you need $5000 to close.  But a week before the application, you deposited $800 worth of cash you had stuffed under your mattress at home.  It’s going to basically be impossible to source and verify where that money came from, so while you really have the money in your account, it will be deducted from the “available balance” that we use to approve your loan.  So now, you have to have $5800 in your account to get to the actual amount of $5000 after the $800 is deducted.  Coming up with even more additional money for closing may be tough.
   Hint: Cash is NOT king.
8. Thou shalt not change bank accounts.This is using the “less is more” approach.  Changing bank accounts require additional verification of not only the account the money is now in, but also the previous account the money may have been withdrawn from.  If the amounts to match up exactly from one to the other, it may spell trouble for your approval.
   Hint: This is getting redundant, I know…but just wait!
9. Thou shalt not co-sign for anyone, or allow authorized users to charge on your credit accounts.
   The quickest  thing that can delay or deny your loan approval will be changes in liabilities.  Just imagine, your 16 year old son is fired up about his new truck.  He has a local gas company credit card that he runs up $500 in gas in 2 weeks carting his friends around the city.  This can change your balances, your FICO score, and your minimum payment.
   Hint: Put everyone on notice that all credit cards are temporarily ‘canceled’ until you give them the ‘ok.’
10. Thou shalt not omit any debts or liabilities from your loan application.
    This is a major issue and could be viewed as mortgage fraud.  If convicted, you could face 30 years in prison and up to $1,000,000 in fines.
    Hint: The truth shall set you free.  Trust me, it’s not worth the alternative.

Breaking any one of these commandments could result in your loan being denied.  A good rule of thumb is to always notify your loan officer immediately if any of these issues come up during your loan application.  They can tell you how each broken commandment needs to be addressed.

Following these 10 Commandments will lead you to the promise land of LOAN APPROVAL!

If you have questions, please leave a comment below.  You can also contact me with any personal questions.

Mark@themortgagemark.com    www.themortgagemark.com 

How to Fight High Property Taxes

 

 

 

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DATE:APRIL 9, 2014 | CATEGORY:TIPS & ADVICE | AUTHOR:MARY BOONE 

Death and taxes. Benjamin Franklin espoused their certainty, but it’s doubtful even he knew how difficult it would be to avoid the latter – especially property taxes.

No matter where you live in the United States, if you own real estate, you must pay property taxes. According to a recent study by Zillow, a U.S. property owner pays an average of around $2,800, or approximately 1.4 percent of their home’s value each year in property taxes. Of course, that “average” figure indicates some homeowners pay more while others pay less. The counties with the highest averages are Westchester County, NY ($14,829 per year); Essex County, NY ($12,051 per year) and Bergen County, NJ ($11,172 per year).

Do you know how much you pay in property taxes? Look up your home on Zillow – the information is there on your home details page.

Deciphering how property tax rates are set is not easy. There is no single formula used by states and counties to calculate property taxes. In fact, more than 13,500 local governments have the authority to assess property taxes; all states allow local governments to set their own tax rates even though many states place limits on their rates.

Still, understanding the process is your first step toward knowing whether or not you’re paying too much in property taxes. Start by visiting your local assessor’s office to find out how they assess properties. Ask how you might go about appealing your assessment. Most municipalities require property owners to lodge their appeal within 60 days of when annual assessments are mailed; check with local authorities for details regarding your city or county and get copies of the forms you’ll need to complete. Homeowners cannot contest their property tax rates, but they may be able to lower the assessed value of their home by filing an appeal.

Once you have a basic understanding of the assessment process, you’ll want to do your due diligence to determine whether you’re being overtaxed:

Fact check

Get your property card from your local assessor’s office; in some municipalities, these documents can be accessed online. Your property card – also known as a property’s “working papers” or “worksheet” – includes factors used to determine your home’s assessed value: square footage, lot size, number of bedrooms and bathrooms, etc. If, for example, the assessor’s office believes your home includes a three-car garage but no such feature exists, it’s likely your assessment is incorrect.

Know your neighborhood

Most cities and counties assess homes on a one- to three-year cycle. It’s natural, then, that a home’s assessed value will fail to keep up with changes in local real estate prices. A local decline in home prices could leave you paying more than your fair share of property taxes.

When determining whether your home has been properly assessed, you’ll need to know the assessment of comparable homes – same size, same location, same amenities. Using information available from your assessor or on Zillow, search for at least five comparable homes that have sold in your neighborhood within the past year. If you discover that your home is valued at least 5 percent to 10 percent higher than comparable properties, you may be able to file a successful appeal.

Present your case

The National Taxpayers Union estimates that up to 60 percent of U.S. properties are overassessed. If you believe yours has been, gather documents that support your case and ask for an informal meeting with a representative from your local assessor’s office. If the assessor won’t agree to a meeting, or if your assessment isn’t adjusted as a result of the meeting, you may want to file a formal appeal.

The appeals process varies greatly, but most municipalities require appeals to be submitted in writing along with evidence that supports the request for a reassessment. Once a formal appeal has been filed, a decision generally is handed down within two to four weeks. If you aren’t successful, you may be able to take your appeal to a state review board. If you’re still not getting the answer you want, you may be able to take your case to court – at which time you need to consider whether court fees outweigh any potential reduction in property taxes.

8 Customer Choices Which Will Get Your Mortgage Loan Approval “Revoked” By The Bank

For all the talk of how tough it is to be "mortgage approved", the basics of mortgages haven't changed. Getting a mortgage approval is still a combination of showing good income, equity, and credit.

For some mortgage applicants, though, it's not the mortgage approval that's the hard part -- it's keeping the mortgage approval.

There are plenty of land mines in the mortgage approval process. You'll want to stay clear of them.

Click here to see today's low mortgage rates.

When Things Go Wrong With Your Mortgage

Mortgage approvals take time. In a typical home loan market, 45 days is normal time frame.

Approvals can take longer, though, depending on the market environment. For example, if rates are low and there's a refi boom on-going, getting a refinance to close can take as much as two month -- especially for "complicated" loans which require additional paperwork such as the 5-10 Properties Program.

Banks just don't have capacity to work much faster.

Closing times can also be delayed for buyers of short sales and foreclosures. Loans for distressed sales and REO sometimes take 6 months or longer to get to settlement.

Thing is, during that "extra time" it takes to close -- whether it's 3 weeks, 3 months or longer -- your life is subject to unexpected change. When your life changes, your loan can change, too.

For example, if lose your job, become ill, or have your home damaged by storms, your lender can rightfully revoke your mortgage approval -- even if your loan was previously cleared-to-close.

Some life events are beyond your control. You can't control sickness any more than you can control Mother Nature. But some events are within your control.

In the world of mortgages, good behavior does matter.

Bad Mortgage Behavior, Defined

Keeping "good behavior" in mind, here are 8 things you should absolutely not do between your date of application and your date of funding. Any one of them could force a revocation of your mortgage approval.

Ignore these rules at your own peril. 

1. Don't buy a new car or trade-up to a bigger lease
2. Don't quit your job to change industries or start a new company
3. Don't switch from a salaried job to a heavily-commissioned job
4. Don't transfer large sums of money between bank accounts
5. Don't forget to pay your bills -- even the ones in dispute
6. Don't open new credit cards -- even if you're getting 20% off
7. Don't accept a cash gift without filing the proper "gift" paperwork
8. Don't make random, undocumented deposits into your bank account

And that's it.

Now, you may find it 100% impractical to have follow these rules to the letter. I know that.

For example, if your car lease is expiring, you have to do what you have to do. Renew the lease. Before doing it, though, check with your loan officer -- spreading your lease over 60 or 72 months may be better for your debt-to-income (DTI) ratio. 

The same goes for accepting cash gifts from parents. There's a right way and a wrong way to accept a cash gift for a purchase and if you do it the "wrong way", your lender may disallow the gift and deny the loan.

These are just 8 of the behaviors which could sabotage your loan. There are more, of course, and your lender will help you identify them. 

Good Loan Approvals Start With Low Mortgage Rates

For today's U.S. home buyers and refinance household, mortgage approval times are running longer than typical. The extra time leaves more opportunity for "things to go wrong" -- especially as low mortgage rates lead to underwriting backlogs nationwide.

Don't let your mortgage get un-approved. Get today's low mortgage rates and follow steps to protect it. Personalized mortgage rates are available online for free, with no obligation whatsoever.

Click here to see today's low mortgage rates.

Contact The Mortgage Mark with any questions!!

www.themortgagemark.com   mark@themortgagemark.com  

The HARP 2.0 Rules : Complete HARP 2 Eligibility Requirements For U.S. Homeowners

The HARP 2.0 Rules : Complete HARP 2 Eligibility Requirements For U.S. Homeowners (Plus Mortgage Rates)

This HARP 2.0 information is accurate and current as of today, January 29, 2014. This post has been updated since its original publish date to reflect changes to HARP 2.

If you're underwater on your conforming, conventional mortgage, you may be eligible to refinance without paying down principal and without having to pay mortgage insurance.

Here are the details of the government's new HARP refinance program.

Give me today's HARP mortgage rate.

What Is HARP?

HARP was started in April 2009. It goes by several names. The government calls it HARP, as in Home Affordable Refinance Program.

The program is also known as Making Home Affordable, the Obama Refi, A Better Bargain For U.S. Homeowners, DU Refi Plus, and Relief Refinance.

In order to be eligible for the HARP refinance program :

1. Your loan must be backed by Fannie Mae or Freddie Mac.
2. Your current mortgage must have a note date of no later than May 31, 2009

If you meet these two criteria, you may be HARP-eligible. If your mortgage is an FHA, USDA, VA or a jumbo mortgage, you are not HARP-eligible.

Underwater FHA mortgages can be refinanced via the FHA Streamline Refinance program. Underwater VA mortgages can be refinanced via the VA IRRRL mortgage program (VA Streamline Refinance).

Underwater USDA loans can be refinanced via the USDA Streamline Refinance program, which is available in most states.

HARP : Questions and Answers

Do these question-and-answers account for the "new" HARP mortgage program?

Yes, everything you are reading is accurate as of today, January 29, 2014. This post includes the latest changes as rolled out by the Federal Home Finance Agency on October 24, 2011, and as confirmed by Fannie Mae and Freddie Mac on November 15, 2011. HARP 2.0 was formally released by Fannie Mae and Freddie Mac March 17, 2012.

Is "HARP" the same thing as the government's "Making Home Affordable" program?

Yes, the names HARP and Making Home Affordable are interchangeable. The program is also known as DU Refi Plus and Relief Refinance, and many mortgage lenders call it "The Obama Refi".

Is HARP the same thing as the White House's "A Better Bargain For Responsible Homeowners"?

No, the HARP program is not the same as the White House's A Better Bargain for Responsible Homeowners program. HARP is a specific mortgage refinance product. The "A Better Bargain" program is the White House's recommended set of mortgage market reforms. The changes suggested by the White House may later manifest as HARP 3, but we don't know when HARP 3 will pass.

How do I know if Fannie Mae or Freddie Mac has my mortgage?

Fannie Mae and Freddie Mac have "lookup" forms on their respective websites. Check Fannie Mae's first because Fannie Mae's market share is larger. If no match is found, then check Freddie Mac. Your loan must appear on one of these two sites to be eligible for HARP.

If my mortgage is held by Fannie Mae or Freddie Mac, am I instantly-eligible for the Home Affordable Refinance Program?

No. There is a series of criteria. Having your mortgage held by Fannie or Freddie is just a pre-qualifier.

My mortgage is held by Fannie/Freddie. Now what do I do?

Find a recent mortgage statement and write "Fannie Mae" or "Freddie Mac" on it -- whichever group backs your home loan -- so you don't forget. Give that information to your lender when you apply for your HARP refinance. Click here to verify your HARP eligibility.

My mortgage is backed by Wells Fargo. Am I eligible for HARP?

It's possible that your mortgage is backed by Wells Fargo, but the more likely answer is that Wells Fargo is just your mortgage servicer; the bank that collects your payments. Wells Fargo backs very few of its own loans. Most loans for which payments are sent to Wells Fargo are backed by either Fannie Mae or Freddie Mac. Double-check with Fannie Mae and Freddie Mac before assuming Wells Fargo backs your loan.

My mortgage is backed by Bank of America. Am I eligible for HARP?

Bank of America does back some of its own loans, but the more likely answer is that Bank of America is your mortgage servicer; the bank that collects your monthly mortgage payments. Bank of America backs very few of its own loans. For most loans for which payments are sent to Bank of America, Fannie Mae or Freddie Mac are the actual loan-backers. Double-check with Fannie Mae and Freddie Mac to make sure Bank of America doesn't hold your loan.

My mortgage is backed by Chase. Am I eligible for HARP?

There is a chance that Chase backs your loan, but what's more likely is that Chase is just your mortgage servicer; the bank that collects your payments each month. Chase backs very few of its own loans. For most loans for which payments are sent to Chase, you'll find that Fannie Mae or Freddie Mac are the actual loan-backers. Double-check with Fannie Mae's and Freddie Mac's websites to make sure your loan is not held by Chase.

My mortgage is backed by CitiMortgage. Am I eligible for HARP?

Your mortgage statement may have the CitiMortgage logo on it, but that doesn't necessarily mean that CitiMortgage back your loans. It's more likely that CitiMortgage is your mortgage servicer; the bank paid to process your payment each month. With most loans for which payments are sent to CitiMortgage, the actual loan-backer is Fannie Mae or Freddie Mac. Double-check with Fannie Mae's and Freddie Mac's websites to see if you can find your loan.

My lender won't do HARP. Can I use HARP with another lender?

Yes. You can do HARP with any participating mortgage lender. This is a major change from the original HARP. The government is trying to get as many people access to the program as possible. If you were once turned down for HARP by your original mortgage lender, re-apply somewhere else. You'll likely have better luck. Click here to get access to free HARP rates.

My mortgage servicer does not do new mortgages. How do I use HARP?

Not all mortgage servicers have loan officers on staff. However, that should no bearing on your ability to get a HARP refinance. As a U.S. homeowners, you can work with any participating lender in the country so reach out to your favorite bank and get started from there. Or, to just compare mortgage rates, use this form and you'll get your options.

What if neither Fannie Mae nor Freddie Mac has a record of my mortgage?

If neither Fannie nor Freddie has record of your mortgage, your loan is not HARP-eligible. However, you may still be eligible for a "regular" refinance to lower rates. Use this form to get a rate quote to see your options. Or, if your mortgage is insured by the FHA, use the FHA Streamline Refinance program. The FHA Streamline Refinance helps underwater homeowners, too.

I have a jumbo mortgage. Can I use HARP 2.0?

No, HARP 2.0 is not meant for jumbo mortgages. It's for mortgages backed by Fannie Mae or Freddie Mac only. There is talk of a HARP 3 program coming soon. HARP 3 may include loan types not covered by today's program guidelines. You can read more about HARP 3.

I have an Alt-A mortgage. Can I use HARP 2.0?

No, HARP 2.0 is not meant for Alt-A mortgages. It's for mortgages backed by Fannie Mae or Freddie Mac only. There is talk of a HARP 3 program, though, which may include loan types not covered by today's HARP program guidelines.

I have an interest only mortgage. Can I use HARP 2.0?

If your current mortgage is interest only, you may be able to use HARP. If your interest only mortgage is a conforming loan backed by Fannie Mae or Freddie Mac, you should be HARP-eligible. Otherwise, your loan may be an Alt-A or sub-prime mortgage in which case you will not be HARP 2-eligible. HARP 3 may allow for interest only loans and other loan types not covered by today's program guidelines.

I have a balloon mortgage. Can I use HARP 2.0?

If your current mortgage is a balloon mortgage, you may be able to use HARP. It depends on whether your loan is conforming, and whether it's backed by Fannie Mae or Freddie Mac. If you are not HARP 2-eligible, there is talk of a HARP 3 program and that may help you. HARP 3 may allow for the refinance of a balloon mortgage.

What is HARP 3?

HARP 3 is the next iteration of HARP. It's currently in talks in Congress, and sometimes referred to as "#MyRefi", or "A Better Bargain For Homeowners". There is no expectation for when, or if, it will be passed. HARP 3 is rumored to include all of the loan types and borrowers who are specifically excluded from HARP 2.

Does HARP work the same with Fannie Mae as with Freddie Mac?

Yes, for the most part, the program is the same with Fannie Mae as with Freddie Mac. There are some small differences, but they affect just a tiny, tiny portion of the general population. For most people, though, the guidelines work the same.

My bank sent me a HARP rate quote by mail. It looks like a high interest rate. Should I shop it around?

Yes, you should always compare HARP mortgage rates because they can vary widely from bank-to-bank. You may save a lot of money just by getting a second opinion on your mortgage.

Am I eligible for the Home Affordable Refinance Program if I'm behind on my mortgage?

No. You must be current on your mortgage to refinance via HARP.

I've been told by my bank that I'm not eligible for HARP. I think my bank is wrong. Can I get a second opinion?

If you've been turned down for HARP but believe that you're eligible, you can apply with a different bank and see what happens. Different banks are using different variations of the program. The changes are subtle, but they're enough to cause some people to get denied who should otherwise have been approved.

My lender denied my HARP mortgage because my LTV is too high. What do I do?

Some banks are enforcing subtle variations of the official HARP program guidelines. The edits are small, but they're enough to cause some people to get denied who should otherwise have been approved. If you've been turned down for HARP 2.0, just try with a different bank

My lender denied my HARP mortgage because credit scores are too low. What do I do?

Some banks are making variations on the official HARP program guidelines. The changes are subtle, but they're enough to cause some people to get denied who should otherwise have been approved. If you've been turned down for HARP 2.0, just try with a different bank. 

What is the mortgage rate for a HARP refinance?

Mortgage rates for the HARP mortgage program are the same as for a "traditional" refinance. There is no "premium" for using the HARP program. Make sure you shop around, therefore -- just like you would with a non-HARP refinance.

Should I shop for the lowest HARP mortgage rates?

Yes, you should shop for the lowest HARP mortgage rates. HARP mortgage rates vary from bank-to-bank and so do closing costs. Talk to at least 2 banks so you can know you're getting a fair deal.

Will the Home Affordable Refinance Program help me avoid foreclosure?

No. The Home Affordable Refinance Program is not designed to delay, or stop, foreclosures. It's meant to give homeowners who are current on their mortgages, and who have lost home equity, a chance to refinance at today's low mortgage rates.

What are the minimum requirements to be HARP-eligible?

First, your home loan must be paid on-time for the prior 6 months, and at least 11 of the most recent 12 months. Second, your mortgage must have a note date of no later than May 31, 2009. And, third, you may not have used the program before -- only one HARP refinance per mortgage is allowed.

My home is not underwater. Can I still use HARP 2.0?

Yes, you can use HARP even if you're not "underwater".

Will HARP 2.0 "forgive" my mortgage balance?

No, HARP does not forgive your mortgage balance, nor does it reduce your principal owed. HARP refinances your current loan balance only. It is the same as any other refinance.

My mortgage note date is shortly after the HARP deadline of May 31, 2009. Can I get a waiver or exception?

No, there are no "date exceptions" for HARP. If your note date is not on, or before, May 31, 2009, you cannot use the program.

Why was the date May 31, 2009 chosen as the HARP deadline?

There's no official answer for this one but, in March 2012, a Fannie Mae representative said that May 31, 2009 was selected as the HARP cut-off date because that those who financed a home with a mortgage prior to May 31, 2009 may not have been aware of the rapidly changing mortgage market.

I missed the May 31, 2009 HARP cut-off date by several days. Can you make an exception?

If you've missed the program's cut-off date, there are no exceptions made. However, there is talk that a HARP 3.0 program will extend the program start date into 2010 or 2011.

If I refinanced with HARP a few years ago, can I "re-HARP" with HARP 2?

No. You can only use the HARP mortgage program one time per home. If you used HARP 1, you cannot use HARP 2.0.

I refinanced into a HARP loan a few years ago, but my bank never told me it was a HARP loan. I feel like I was lied to. Can I use the program again under the HARP II?

No. You can only use the HARP mortgage program one time per home. If you used HARP 1, you cannot use HARP 2.0. The government makes no exceptions on this policy.

Is there a loan-to-value restriction for HARP?

No. All homes -- regardless of how far underwater they are -- are eligible for HARP.

I am really far underwater on my mortgage. Can I use HARP?

Yes, you can use HARP even if you're really far underwater on your mortgage. There is no loan-to-value restriction under the HARP mortgage program so long as your new mortgage is a fixed rate loan with a term of 30 years or fewer. If you use HARP to refinance into an adjustable-rate mortgage, your loan-to-value is capped at 105%.

Maybe I wasn't clear. I am really, really far underwater on my mortgage. Are you sure I can use HARP?

Yes, I am sure. The new HARP mortgage program specifically has no loan-to-value restriction so that homeowners in Florida, California, Arizona and Nevada can take advantage of it. You can have 300% loan-to-value, and still be HARP-eligible. HARP is now unlimited LTV for fixed rate loans with 30-year terms or less.

You keep saying LTV doesn't matter, but my bank turned me down for HARP because my loan-to-value was too high.

That's normal, actually. Not every bank will underwrite HARP loans to the letter of the guidelines. Loans with high LTVs can be risky to a bank. Therefore, some banks will limit their business to loans under 125% loan-to-value, for example. Remember -- just because one bank turned you down doesn't mean that every bank will. Apply somewhere else to get a second option.

My home is gaining value as the housing market improves. Will this hurt my ability to use HARP to refinance my home?

In general, no. As your home increases in value, its loan to-value decreases. So long as your loan-to-value remains above 80 percent, you should remain HARP-eligible. In the event your home's loan-to-value falls below 80%, you may have difficulty finding lenders to refinance your home. As always, remember to shop around. If the first bank you ask says no, it doesn't mean that all banks will say no, too.

If I refinance with HARP using an ARM, do I still get "unlimited LTV"?

No, if you use an ARM for HARP 2.0, you are limited to 105% loan-to-value. Only fixed rate loans get the unlimited LTV treatment.

Why does my bank say I'm limited to 105% LTV with my HARP refinance? I want a fixed-rate loan.

Not all banks are honoring the HARP 2.0 mortgage guidelines as they are written and one common "edit" is to change the maximum allowable LTV. You may want to get a HARP rate quote from another bank -- one that won't restrict your loan size.

Why does my bank say I'm limited to 125% LTV with my HARP refinance? I want a fixed-rate loan.

Not all banks are honoring the HARP 2.0 mortgage guidelines as they are written and one common "edit" is to change the maximum allowable LTV. You may want to get a HARP rate quote from another bank -- one that won't restrict your loan size.

Will my home require an appraisal with the HARP mortgage program?

Sort of. Although your home's value doesn't matter for the HARP mortgage program, lenders will run what's called an "automated valuation model" (AVM) on your home. If the value meets reliability standards, no physical appraisal will be required. However, your lender may choose to commission a physical appraisal anyway -- just to make sure your home is "standing".

Is HARP the same thing as an FHA Streamline Refinance?

No, the HARP mortgage program is administered through Fannie Mae and Freddie Mac. FHA Streamline Refinances are performed through the FHA. The programs have similarities, however.

I have an FHA mortgage. Can I use the HARP 2.0 program?

No, you cannot use the HARP 2.0 program for an FHA loan. If your current mortgage is backed by the FHA, and your home is underwater, use the FHA Streamline Refinance program.

I have a USDA mortgage. Can I use the HARP 2.0 program?

No, you cannot use the HARP 2.0 program for a USDA loan. If your current mortgage is backed by the USDA, and your home is underwater, use the USDA Streamline Refinance program.

I have a VA mortgage. Can I use the HARP 2.0 program?

No, you cannot use the HARP 2.0 program for a VA loan. If your current mortgage is backed by the VA, and your home is underwater, use the VA IRRRL program.

Does Ginnie Mae participate in the HARP Refinance program?

No, Ginnie Mae does not participate in the HARP Refinance program. Ginnie Mae is associated with FHA mortgages -- not conventional ones. HARP 2 is for conventional mortgages only.

Do I have to HARP refinance with my current mortgage lender?

No, you can do a HARP refinance with any participating mortgage lender.

So, I can use any mortgage lender for my HARP Refinance?

Yes. With the Home Affordable Refinance Program, you can refinance with any participating HARP lender.

My current bank says that they're the only ones who can do my HARP Refinance. Is that true?

No, that's not true. Or, at least it shouldn't be. There are very few instances in which a HARP applicant will be precluded from shopping for the best rate. It's doubtful that your situation is one of them.

My current mortgage is with [YOUR BANK HERE] and I don't like them. Can I work with another bank?

Yes, with HARP, you can work with any participating lender in the country.

My bank says I can't get a HARP loan unless I work with them. Is that true?

Except in rare cases, no. With HARP, you can work with any participating lender in the country. And there are a lot of them.

Can I refinance my HARP mortgage into a shorter term? I want a 15-year fixed rate mortgage -- not a 30-year.

Yes, you can shorten your loan term via HARP. You must still qualify for the mortgage based on payments, though. If the "payment shock" of switching to a 15-year fixed rate mortgage is deemed to steep, your lender may not approve the loan. Be sure to ask.

I put down 20% when I bought my home. My home is now underwater. If I refinance with HARP, will I have to pay mortgage insurance now?

No, you won't need to pay mortgage insurance. If your current loan doesn't require PMI, your new loan won't require it, either.

I pay PMI now. Will my PMI payments go up with a new HARP refinance?

No, your private mortgage insurance payments will not increase. However, the "transfer" of your mortgage insurance policy may require an extra step. Remind your lender that you're paying PMI to help the refinance process move more smoothly.

My bank says I can't refinance with HARP 2.0 because I have PMI. Is that true?

No, it's not true. You can refinance via HARP 2.0 even if your current mortgage has private mortgage insurance.

Why does my loan officer tell me I can't refinance with HARP because my current mortgage has PMI?

HARP has many rules and guidelines and all loan officers are up-to-speed on what's going on. If you're hearing that you can't refinance your current mortgage because it has PMI on it, it may be a signal to shop around.

My current mortgage has Lender-Paid Mortgage Insurance (LPMI). Can I refinance via HARP?

Yes, you can refinance your mortgage via HARP 2.0 if your current loan has lender-paid mortgage insurance (LPMI). It's your loan officer's responsibility to make sure that your new mortgage carries, at minimum, the same amount of coverage.

You're saying I can refinance with LPMI but my bank says I can't. Who is right?

With respect to LPMI, different banks have different rules for HARP. There are banks closing HARP loans with lender-paid mortgage insurance attached. That's a fact. If your bank won't do loans with LPMI, find one that will.

How do I choose my PMI "coverage" when I refinance a HARP loan that has LPMI?

Your loan officer will know what to do. Just make sure you disclose that your mortgage has LPMI at the time of application so your loan officer knows what to do. Otherwise, your loan could be delayed in processing.

Click here for a HARP rate quote.

How do I know if my mortgage has Lender-Paid Mortgage Insurance (LPMI)?

To find out if your mortgage has lender-paid mortgage insurance (LPMI), locate your loan paperwork from closing. There should be a clear disclosure that states that your mortgage features LPMI, and the terms should be clearly labeled for you.

I don't see an LPMI disclosure in my closing package but I think that I have it. How do I know if my mortgage has LPMI?

If there is no LPMI disclosure, first check if your first mortgage's loan-to-value exceeded 80% at the time of closing. If it did, look to see if you are paying monthly mortgage insurance. If you are not paying monthly PMI, you're likely carrying LPMI.

I was turned down for HARP because the bank says I have mortgage insurance. I think they're wrong.

There are different types of private mortgage insurance and not all kinds are paid monthly. One such example is lender-paid mortgage insurance for which your lender pays PMI on your behalf each month. You don't see the payments made, but you still have PMI. There are banks that will HARP-refinance loans with LPMI. If your bank says no, ask another bank and you may get a different answer.

What's the bottom line with HARP refinances and mortgage insurance?

With HARP, regardless of whether you have borrower-paid mortgage insurance (BPMI) or lender-paid mortgage insurance (LPMI), a refinance is possible. The key is that the new loan has mortgage insurance coverage at least equal to the mortgage insurance coverage on your current mortgage.

What if my lender won't give me a HARP refinance because I have mortgage insurance?

If your lender tells you that you can't have a HARP 2.0 loan because you have mortgage insurance, find a new lender. There are plenty that of banks that can help you.

What's the biggest mortgage I can get with a HARP refinance?

HARP refinances are limited to your area's conforming loan limits. In most cities, the conforming loan limit is $417,000. However, there are some cities in which conforming loan limits are as high at $625,500.

Can I do a cash-out refinances with HARP?

No, the HARP mortgage program doesn't allow cash out refinance. Only rate-and-term refinances are allowable.

Can I refinance a second/vacation home with HARP?

Yes, you can refinance an second/vacation property with HARP, even if the home was once your primary residence. The loan must meet typical program eligibility standards.

Can I refinance an investment/rental property with HARP?

Yes, you can refinance an investment/rental property with HARP, even if the home was once your primary residence. You can refinance a home on which you're an "accidental landlord". The loan must meet typical program eligibility standards.

I rent out my old home. Is it HARP-eligible even though it's an investment property now?

Yes, you can use the HARP Refinance program for your former residence -- even if there's a renter there now.

How long do I have to stay in my house if I use HARP on my primary residence?

There is no specific timeframe for which you're required to stay in your home if you use HARP 2.0. Just like any other mortgage, if you plan to stay in your home post-closing, it's your primary residence. If you plan to turn it into a rental, it's an investment property.

Click for an instant HARP rate quote.

These things I'm reading here... Why, when I call my bank, do they tell me it's not true?

It's possible that the call center representative to whom you're speaking is neither knowledgeable about HARP, nor the actual mortgage underwriting process. This post is researched and cross-referenced against Fannie Mae and Freddie Mac guidelines, and publicly-available reports from the FHFA.

Are condominiums eligible for HARP refinancing?

Yes, condominiums can be financed on the HARP refinance program. Warrantability standards still apply.

My bank says that condos can't be refinanced via HARP?

That's not true. Condominiums can be financed on the HARP refinance program. If your current lender is unable or unwilling to help, remember that you can take your HARP loan to any participating bank in the country. Other banks may know what to do with condos.

Can I consolidate mortgages with a HARP refinance?

No, you cannot consolidate multiple mortgages with the HARP refinance program. It's for first liens only. All subordinate/junior liens must be resubordinated to the new first mortgage.

Is there a HARP program for second mortgages? My second mortgage is at a high rate and I want to refinance it.

No, the Home Affordable Refinance Program is for first mortgages only. Second mortgages cannot be refinanced via HARP, nor can they be consolidated into a first mortgage.

What happens to my second mortgage when I refinance my first mortgage using HARP 2.0?

HARP 2.0 is meant for first liens only. Second liens are meant to subordinate. You'll get to replace your first mortgage and your second mortgage will remain as-is. Just be sure to mention your second mortgage at the time of application so your lender knows to order the subordination for you.

My second mortgage company won't let me refinance my first mortgage via HARP. Can they do that?

With the HARP refinance program, second liens are meant to subordinate. Second lien holders know this, however, not all second lien holders will agree to it. This is against the spirit of the program, but second lien holders are within their rights to deny the refinance.

My second mortgage isn't backed by Fannie Mae or Freddie Mac. Is that a problem?

No, it doesn't matter if your second mortgage isn't backed by Fannie Mae or Freddie Mac. Second mortgages are ignored as part of HARP. They can't be refinanced, and they can't be consolidated. Second mortgages are a non-factor in HARP 2.0.

I have an 80/10/10 mortgage. Can I use HARP 2.0?

Yes, if you have an 80/10/10 mortgage, you can use HARP so long as you meet the program's basic eligibility requirements. You cannot combine your two mortgages, however. Nor can you take cash out.

I have an 80/20 mortgage. Can I use HARP 2.0?

Yes, if you have an 80/20 mortgage, you can use HARP so long as you meet the program's basic eligibility requirements. You cannot combine your two mortgages, however. Nor can you take cash out.

My bank is not setup for HARP and I want to refinance. What do I do?

If your current bank is not setup for HARP, find a new lender. HARP is available through any participating bank (and there are a lot of them). Free, no-obligation HARP quotes are available online, too. Click here for live HARP mortgage rates.

Can I "roll up" my closing costs with a HARP refinance?

Yes, mortgage balances can be increased to cover closing costs in addition to other monies due at closing such as escrow reserves, accrued daily interest, and a small amount of cash.  In no cases may loan sizes exceed the local conforming loan limits, however. In most U.S. markets, this limit is $417,000. In certain high-cost areas, including Orange County, California and Fairfax, Virginia, for example, the limit ranges as high as $625,500.

I am unemployed and without income. Am I HARP-eligible?

Yes, you do not need to be employed to use the HARP mortgage program. Applicants do not need to be "requalified" unless their new principal + interest payment increases by more than 20%. If the new payment increases by less than 20%, or falls, there is no requalification necessary.

My lender is asking for income verification. How do I prove income for a HARP loan?

HARP mortgages are underwritten like most other mortgages. When income verification is required, you'll often be asked to provide 2 years of W-2 statements, the two most recent years of federal tax returns, and a recent paystub.

I cannot verify income for my HARP loan. What are my options?

HARP does require verification of income, but some lenders may require it anyway. If you cannot (or will not) verify income with your lender, you may show 12 months of PITI in reserves as a substitute for actual verifiable income. PITI stands for Principal, Interest, Taxes, and Insurance. In short, if you can show that you have 12 months of housing payments "saved up", HARP will treat those reserves as "income".

What is the maximum income that a HARP applicant is allowed?

The HARP refinance program has no maximum income limits. You cannot "earn too much" to qualify.

So, I can't earn too much money to use HARP 2.0?

No, there are no income restrictions for the Home Affordable Refinance Program (HARP). A similar-sounding program, though -- Home Affordable Modification Program (HAMP)does have income limitations. Many people confuse the two.

Is HARP the same thing as HAMP?

No. HARP stands for Home Affordable Refinance Program. HAMP stands for Home Affordable Modification Program. Both programs are supported by the Making Home Affordable initiative, but that's about where the similarities end.

I used HAMP with my current lender. Can I use HARP now?

If you've used the HAMP program with your current lender to modify your mortgage, you may not be HARP-eligible. It depends on the terms of your modification. Ask your current servicer if you're HARP-eligible.

I am now divorced. I want to remove my ex-spouse from the mortgage. Can I do that with HARP?

Yes. With HARP, a borrower on the mortgage can be removed via a refinance so long as that person is also removed from the deed; and has no ownership interest in the home.

Do HARP refinances use Loan-Level Pricing Adjustments (LLPAs)?

Yes, HARP mortgages use loan-level pricing adjustments, but LLPAs are dramatically reduced on a HARP refinance and, in some cases, waived entirely. For example, there are no LLPAs for fixed-rare HARP refinances with terms of 20 years or fewer. For all other loans, loan-level pricing adjustments are capped at 0.75 points.

Does a HARP Refinances require LLPAs for a 15-year fixed rate mortgage?

No, there are no LLPAs for 15-year fixed rate mortgage via the HARP Refinance program.

Is there a minimum credit score to use the HARP?

No, there is no minimum credit score requirement with the HARP mortgage program, per se. However, you must qualify for the mortgage based on traditional underwriting standards.

Do I have to refinance my mortgage with my current lender?

No, you can do a HARP refinance with any participating lender you want.

Where can I get the lowest rates on HARP loans?

The HARP refinance is just like any other mortgage -- you'll want to shop around for the best rates and service. However, because HARP is a "specialty loan", you may want to limit your shopping with reputable lenders that know how to specifically handle HARP loans.

What are the costs to refinance via HARP?

Closing costs for HARP refinances should be no different than for any other mortgage. You may pay points, you may pay closing costs, you may pay neither. How your mortgage rate and loan fees are structured is between you and your loan officer. You can even opt for a zero-cost HARP refinance. Ask your loan officer about it.

What does the term "DU Refi Plus" mean?

"DU Refi Plus" is the brand name Fannie Mae assigned to its particular flavor of the HARP mortgage program. "DU" stands for Desktop Underwriter. It's a software program that simulates mortgage underwriting. "Refi Plus" is a gimmicky-sounding term that could have been anything. The name has been trademarked, however.

What does the term "Relief Refinance" mean?

"Relief Refinance" is the Freddie Mac equivalent of DU Refi+.

I have a 40-year mortgage. Can I use HARP?

Yes, if you have a 40-year mortgage, you can use HARP. You must make sure that you mortgage is backed by Fannie Mae or Freddie Mac, though, and that you meet all other eligibility requirements.

My lender says its not set up for Freddie Mac. How do I do a HARP loan?

Not every bank is participating in the HARP 2.0 program. If you've been told that your bank can't or won't help you, just try with a different bank. There are many banks that are participating in the program.

When does HARP end?

If you are HARP-eligible, you must close on your mortgage prior to January 1, 2016 -- 701 days from now.

How do I apply for HARP?

Click here for a HARP rate quote. If the rate looks good, you can accept it. There is no fee for applying.

Want More HARP 2.0 Information?

When you're ready to see today's HARP mortgage rates, click here for mortgage rates.

Lastly, don't forget! The Home Affordable Refinance Program is not meant to save a home from foreclosure. It's meant to give underwater homeowners a chance to refinance without paying PMI. If you need foreclosure help, call your current loan servicer immediately.

Contact The Mortgage Mark with any questions!!!   www.themortgagemark.com   Mark@themortgagemark.com