Harp Mortgage Refinances Are Not Just For Underwater Borrowers
Over the last few months, since Harp 2.0 became available, homeowners have been applauding the effort by the Obama administration to help them refinance. HARP was targeted at underwater home owners who have been left out of the rush to refinance caused by the lowest mortgage rates in history. The program has been a huge success and homeowners are now saving thousands of dollars every year on the cost of their mortgage. But, a surprising development has been coming together. HARP refinances are not just for underwater home loans!
Fannie Mae and Freddie Mac are now enabling borrowers of all sorts that require some flexibility in their underwriting to finally get approved. The use of automated underwriting allows underwriters to partially remove their discretion from the approval process. While some may argue that there are predictive negative effects from this, no one can argue that it is allowing more homeowners than ever to refinance. So, what are a few reasons that a HARP loan might be the answer that you have been looking for?
- Condominiums: HARP loans do not require the same scrutiny that condo projects have been receiving. Many Condo owners are disheartened when they realize that, even though they are very well qualified, their Condo Association is declined for what seems like a random and irrelevant reason. HARP loans rarely require any real evaluation of the association since the agencies already own the loan, and are therefore already exposed to the condo project. If you’ve run into trouble with refinancing and were told it was because of your condo, try again with a HARP loan.
- Appraisal Waivers:More and more, we are hearing that HARP loans are receiving appraisal waivers. Appraisal waivers are beneficial for a few reasons;
- Unlike an appraisal, which can cost up to $400, there is no cost when an appraisal waiver is used.
- Appraisal waivers remove the risk of an under-appraisal.
- No one is coming to your house, it’s more convenient and if you are redoing a bathroom, it won’t hold up the loan process.
- Reduced Documentation: HARP loans require very minimal documentation. Lenders typically will only require a recent paystub, copy of your home owner’s insurance policy, and last year’s w-2.
Even if you qualify for a conventional refinance, a harp refinance may be a better option. Make sure you find out if you qualify before you decide what loan is your best fit.
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