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Will it help or hurt us to try to refinance with HARP

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Anonymous
Not applicable

Will it help or hurt us to try to refinance with HARP

A little over a year ago, we were behind on our house payments and nearly went into foreclosure. We applied for and were denied a loan modification at that time because of difficulties proving our income. (My husband has his own business, and his portion of our income is not regular monthly.) We appealed twice because we were told we met the criteria, but while we appealed, we also caught up our payments. We have since made paying our mortgage our absolute first bill priority and have been current for about 13-14 months on our home loan. It has been financially difficult for us, but our credit scores are slowly improving. I am currently at 659 and my husband is probably a little higher. 

 

Our current mortgage payment is approximately 1450/month with a principal balance of approximately $182,000. Our home value declined on the most recent tax appraisal to 187,000, so we now owe about 97% of the value of our home. We have also been told that home values in our area are expected to decline slightly again this year. Also, our interest rate is about 6.5%. It is listed as a 30-year fixed unconventional Jumbo with PMI, but it is underwritten by Fannie Mae. I don't know if this is relevant, but I contacted our lender tonight because I thought that Fannie Mae does not guarantee unconventional loans, and I wanted to see if there was some reason we have a jumbo since our loan is not near the $417,000 mark for needing a Jumbo. Our lender confirmed that Fannie Mae guarantees our loan, but they could not explain why it is a Jumbo or if it has an affect on our interest rate. After about 2 hours on the phone while he researched our loan history, he said his manager was going to turn in a request for review because he thought this was an error, and our loan is actually a conventional loan. (Our loan was previously refinanced through Countrywide in 2006.) Does any of this matter for refinancing?

 

Anyway, we think we may qualify for HARP. We are wondering if this would affect our credit. We are also wondering if it would actually lower our monthly payments and/or decrease/maintain/increase the loan term.

 

Thank-you

Message 1 of 5
4 REPLIES 4
SamsungHDTV
Established Contributor

Re: Will it help or hurt us to try to refinance with HARP

You should always refinance if you are eligible for the HARP. It will definetly lower your interest and payments. HARP is a federal refinancing program that negates the minimum credit score and debt to income ratio. It also lets you borrow up to 125% LTV if I'm not mistaken. I'm a Chase banker and I just helped one of my clients lower his payments and interest via HARP loan. He was a happy customer.

Message 2 of 5
gpeach
Regular Contributor

Re: Will it help or hurt us to try to refinance with HARP

What bank are you with now? You may not even need a HARP. Some banks are refinancing currently held mortgages with little or no closing costs. And no apprasial. If you look on the boards there are some getting letters from the banks offering it out of the blue. 

 

 

Message 3 of 5
Anonymous
Not applicable

Re: Will it help or hurt us to try to refinance with HARP

Thank you!

Message 4 of 5
Anonymous
Not applicable

Re: Will it help or hurt us to try to refinance with HARP

Bank of America

Message 5 of 5
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