The Home Affordable Refinance Program, also known as HARP 2.0, will provide big savings for Orange County, CA home owners who have not been able to refinance due to the drop in property values. What makes this program better than previous versions of HARP? The biggest difference is the fact the property value doesn’t matter. While previous versions of HARP allowed a refinance up to 125% of the properties value, most lenders capped the loan to value at 105%. But depending on when the homeowner purchased or refinanced their home, 105% didn’t quite cut it.
Big Savings for Orange County HomeOwners with HARP Refinance
HARP 2.0 also limits the “pricing hits” which previous versions of HARP had. This means the interest rate the homeowner gets will be lower than with previous versions of HARP. This is especially good for condo owners, which are prevalent in Orange County cities like Irvine. Many Orange County homeowners still have mortgage payments based on rates between 5% and 6.5%, depending on when they last refinanced. By refinancing to a rate in the low 4’s, or in some cases, even the 3’s (depends on the loan program term), Orange County homeowners will be able to save hundreds per month, and thousands over the life of the loan.
20 Year Fixed HARP Refinance
While some will be happy to lower their rate with a new 30 year fixed loan, many homeowners in are refinancing into a shorter term loan. Many will find that by choosing a 20 year fixed, not only will their payment either stay the same or drop some, but they will take many years off their loan. The interest savings are even better with a 15 year fixed. However, a 15 year fixed does push the payment higher since the amortization is so short. Still, for those who can afford the higher payment, the thought of having a home paid off in 15 years, in time to retire, and be a big motivating factor.
Your Orange County Mortgage Must Be Fannie Mae or Freddie Mac Owned
The first step is to figure out of your mortgage is owned by Fannie Mae or Freddie Mac. It also must have been purchased by Fannie or Freddie prior to June 1, 2009. At that time, most Conventional loans purchased by Fannie/Freddie were less than $417,000. Also, the programs tended to be fixed rate, although there are also plenty of 3, 5, 7, and 10 year adjustable rate mortgages. If your loan was a stated income program, chances are it is not a Fannie MAe or Freddie Mac loan. The quickest way to determine if your loan is Fannie or Freddie is to check directly with them. You can also complete the questionnaire on the right side of this page and we will check for you.
Also, please feel free to contact me for a detailed analysis and loan scenario based on your exact situation.
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