-Guest Blogger: Jenna Schreiber * Emery Federal * 866-535-9909 * Your Personal Mortgage Ad-visor
Hey, this is Jenna Schreiber, your own personal mortgage ad-visor. I have been in the finance industry for 17 years now, and at the risk of sounding corny…I love helping people get to experience the American dream!
Today I’d like to talk about the newest help we have gotten from the government. Its called the Home Affordable Refinance Program or simply HARP. This program was originally announced by President Obama on February 17, 2009 and is geared toward helping people who are current on their mortgage payments but whose home value has dropped to a point that makes them unable for a traditional refinance.
There are two divisions of this program…one if you have a Freddie Mac conventional mortgage and one if you have a Fannie Mae conventional mortgage. And with that, each has some good news and some bad.
Let me explain each:
For Freddie Mac mortgages you can refinance up to 105% of your current value with an unlimited combined loan to value. For example, if your home is worth 100K then you can refinance up to 105K. If you have two loans and the balance of the two loans equals more than the 105%, that is ok…as long as the 1st mortgage does not go over the 105%. If you have only one mortgage then that mortgage can only be refinanced to the 105%. There is no minimum credit score required, but you cannot be involved in a bankruptcy or foreclosure and your mortgage cannot have been late for the past 12 months. Your federal taxes have to be filed and current also. You have to have been in our home for at least 3 months and if you have a second mortgage they have to be willing to re-subordinate.
The downside to the Freddie Mac portion of this program…the government did not REQUIRE all lenders to implement this program. What that means for Freddie Mac mortgages is this: you can only use this program with the lender that currently holds your mortgage. And because the government did not require this of all lenders…your lender may not be participating. If your lender is not participating…then you cannot refinance using this HARP program.
The next bad thing about this program is…if you were originally an FHA, VA, Alt-A, or sub-prime loan…you cannot use this program…even if your lender is participating. Sorry guys…I wish I made the rules. Also, if your original loan included mortgage insurance, this disqualifies you from this program.
Lets talk about the Fannie Mae portion now. If you have a Fannie Mae mortgage, you can refinance up to 105% of your current value with a combined loan to value maximum of 110%. If your home is worth 100K then you can refinance up to 105K. If you have two loans then the total of the two loans cannot exceed 110K. You must have a credit score of at least 620 and cannot be involved in a bankruptcy or foreclosure. You can have a late mortgage payment or two but only by 30 days. No 60 day late payments are allowed. You cannot have had mortgage insurance on your original loan, you must be current on your federal taxes, and your second mortgage must be willing to re-subordinate.
There are more restrictions on the Fannie Mae portion…but the best part about it is your current lender does not have to be a participant. If you have a lender that is not participating, I can take you to a lender who is.
I know this was a lot of information…and I don’t expect ANYONE to know exactly where they fit in…so if anyone has questions, please please feel free to contact me anytime. It was a pleasure serving you today and in the future.
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