The HARP 2.0 program offers unlimited loan to value refinancing for eligible Orange County, California homeowners. But while HARP allows this, most lenders do not. This has resulted in frustration for HARP eligible homeowners who continue to have a difficult time lowering their interest rate. But those who have been turned down shouldn’t give up because there are a few lenders who will follow the Home Affordable Refinance Program guidelines as they were originally laid out.
No Appraisal Required in Most Cases
Most of the time an appraisal is not required. Some lenders have “overlay” requirements and do ask for an appraisal. but again, there are lenders who will follow the Automated Approval findings. If an appraisal waiver, or “Property Inspection Waiver” is authorized in the approval, then an appraisal not not be needed.
Interest rates have been so low in 2012 that many lenders are too busy with normal refinances to deal with a HARP refinance. To make matters worse, the limited “wholesale lender” options make it difficult for mortgage brokers to find a lender who can close a HARP refinance in less than 90 days. This is why it is important to check with additional lenders if you are being told it will take more than 30 days to close your refinance. It can be scary if you don’t know what interest rate you’ll end up with since your lender can’t close for 90 days. Finding a California HARP lender who can close the loan quickly will save time and money.
HARP 2.0 Eligibilty
There are several basic characteristics of a HARP eligible loan.
- The current loan must be owner by Fannie Mae or Freddie Mac. You can find out if your loan qualifies by using the Fannie Mae Lookup tool and the Freddie Mac Lookup tool.
- The loan being refinanced had to have been purchased by Fannie Mae or Freddie Mac prior to May 31, 2009. The Lookup tools will show the borrower when the loan was purchased. The purchase date is not the same date as when your loan initially closed.
- Generally, most HARP eligible loans will initially have had a loan amount of $417,000 or less. $417,000 was the maximum Conforming loan limit until 2008, when “high cost” areas were granted higher loan limits. Areas like Orange County saw limits increase to $729,750.
- Most Fannie Mae and Freddie Mac loan tend to be fixed rate, although there are also adjustable rate mortgages with fixed rate periods. Fannie/Freddie never bought option ARM’s with 1% start rates. So if your loan had a low teaser rate and the potential to negatively amortize, then it is not a Fannie/Freddie loan.
For those who are eligible and are taking advantage of the HARP program, money is being saved. Imagine someone with a 5.5% interest rate from 2008 being able to lower their rate to something in the low 4’s. In many cases the borrower can not only lower their payment, but can also take years off their loan.
The first step in determining eligibility is to contact a local Orange County, California HARP 2.0 specialist who works with a lender allowing unlimited loan to values.
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