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Is HARP 2.0 better than a short sale for underwater borrowers?

By
Real Estate Agent with Solutions Real Estate

Now that my lender associates have been submitting refinances for underwater borrowers under the new HARP 2.0 program for a few weeks, they have realized a few differences between what was initially promoted for this new program and reality.  Most lenders have overlaid additional underwriting requirements--some lenders will still only look at a maximum loan to value ratio of 125%.  That will not help a majority of underwater homeowners in Arizona at this time. 

The refinances are at a lower interest rate but they are NOT Principal Reductions, so you still owe the same loan balance.  The message I have been sending homeowners for years remains the same:  You should strive to gain your equity back faster by making additional principal payments each month.  If you qualify for a HARP 2.0 refinance that will get you one step closer.   At today's interest rates, you can save on average about $300 in interest so why not put that back into paying down your principal?   Having equity in your home is a great thing.   You might not need to move today, but when you do, won't it be nice to get something from the sale instead of having to dig deep just to get out from under your mortgage.

Life marches on and some people can't afford to wait.   So, we are always available to help those homeowners who do need to move now.   Short sales are closing much quicker and for more money than ever before.  In fact, prices have been steadily rising in Arizona the last few months because there is an unprecedented shortage of homes for sale.   If you need to sell - let us help!

Posted by

Audry Wolff, Associate Broker
SOLUTIONS REAL ESTATE
Serving the Phoenix East Valley with
Professionalism, Integrity, RESULTS!
Phone/Text 480-244-8398Ā  Toll Free 800-480-7505

Comments (1)

Jim McNinch
Trademark Loss Mitigation - Spring, TX
Short Sale Specialist, Texas

Audrey:  Your logic is sound but will most homeowners put that money into an upside down home or put that money twards a new plasma 60 inch flat screen TV?  Please forgive my cynicism...

Apr 12, 2012 08:21 AM