Many homeowners across the country are underwater – stuck with a mortgage that is higher than the present value of their home. To make matters worse, a vast number of homeowners faced with this predicament have had difficulty qualifying for normal refinancing loans.
In an effort to help provide these homeowners with some relief, the government created a loan program called HARP (Home Affordable Refinance Program). However, instead of providing substantial aid, and despite being revised, the HARP program has proved to be exceptionally complex, which has made it extremely hard for homeowners to qualify for this refinancing option.
Be that as it may, if you are a homeowner who has been told by your loan officer (LO) that you are not eligible for HARP refinancing, it might be time to seek a second or even third opinion. The reason is not all LOs have equal understanding of this program. In other words, your problem with qualifying could be your LOs lack of knowledge, and not that you are ineligible.
Therefore, it is imperative that you pose the following five questions to your loan officer, regardless of whether or not this is your first time checking to see if you qualify for the HARP program, or if you are seeking another opinion to determine your eligibility.
1. Is there a maximum LTV limit that you can lend on?
Find another lender if your current lender is limited to an LTV (loan-to-value ratio) of 105% and your LTV exceeds this percentage. The HARP program only limits LTV on loans with a term that is longer than 30 years and on adjustable rate mortgages. Thus, if you have a new fixed rate mortgage loan with a term that is 30 years or less, LTV limitations should not apply to you.
2. Does the HARP mortgage program allow me to refinance a rental property or condo?
Yes. HARP allows you to refinance both. If the lender with whom you are currently dealing will not or cannot refinance either of these property types, take your business to another LO or to any other participating bank in the U.S. that will.
3. Do I meet the basic HARP refinancing qualification guidelines based on my present mortgage?
Your LO should know that in order for you to meet basic HARP qualifications it is mandatory for you…
- to not have previously refinanced your mortgage under HARP, unless it was a Fannie Mae refinanced HARP loan that occurred between March 2009 and May 2009
- to be current on your mortgage payments for the last 12 months
- to have a mortgage that was sold to Freddie Mac or Fannie Mae prior to or on May 31, 2009
- to have a LTV that is currently higher than 80%
- to have a mortgage that is Fannie Mae or Freddie Mac guaranteed or owned
4. Do you need an appraisal?
If your loan officer tells you that you require an appraisal without first seeing if you qualify for an appraisal waiver, go somewhere else. A good LO will help you determine if you qualify for an appraisal waiver by correctly entering your information though the automated underwriting systems of Freddie Mac or Fannie Mae.
5. Will you accept a transfer of my mortgage insurance?
Choose a lender who accepts lender paid mortgage insurance (LPMI) or private mortgage insurance (PMI). If your current lender doesn’t accept it, find one who will.
What it all boils down to is that you are not limited to the opinion of one loan officer. Find a professional who has the experience and the HARP qualification knowledge you need. Don’t just take “no” for an answer. Discover what mortgage refinancing options are available to you.
Craig Reynolds is a seasoned entrepreneur and mortgage industry veteran with over 15 years experience in managing and loan consulting. Craig is noted as establishing successful Mortgage Consulting teams that create and foster long-term relationships with clients. Contact www.alliedmortgagedirect.com.