The Home Affordable Refinance Program, also known as HARP 2.0, has now been available for approximately 1 month. Is it working? Are Orange County home owners who had not been able to refinance because of the drop in property values now able to take advantage of low rates. Well, the answer is “yes”, at and sometimes “no”. There has been some frustration over who can get approved and who can’t. What are some of the hurdles lenders and HARP borrower are  running into? Of course knowing the basic HARP Refinance guidelines is important as well.

The more “upside down” the borrower is, the stronger the borrower needs to be financially. For example, if a homeowner in Irvine owes $350,000 on a home worth $275,000, putting them over 125% loan to value, then they will probably need to have perfect credit and money in the bank. But that’s not always the case. But if the home is a condo and it is now an investment property, the HARP lender may have a difficult time get the all important “Automated Underwriting” approval.

What Factors will Effect getting Loan Approval on your Orange County HARP Refinance?

  • Loan to Value
  • Property type – Single Family versus Condo
  • Status of property  – is it your primary residence or is it a condo?
  • Money in the bank – does the borrower have the ability to save? Are there reserves in case of an emergency?
  • Is the loan owned for Fannie Mae or Freddie Mac? Both have their own Automated Underwriting, and both seem to be a little different.

It is important to talk to a knowledgable Orange County HARP lender when trying to figure out if a refinance makes sense. Also, keep in mind that you only get to do a HARP refinance once. So choose your lender wisely.

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Tim Storm

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