Many people have the misconception that to qualify for the Home Affordable Refinance Program they must contact their current servicer to refinance when they are underwater. This is not the case. While your current servicer or bank may be able to offer one option to drop your payment, many times they do not offer the programs necessary to complete a refinance through the HARP program. After all do they really want you to refinance and lower your interest rate when they directly benefit from keeping you at a high rate?
Not sure what we are talking about, read our previous article: What is HARP?
Many of our clients here at Riverbank Finance have been turned down for the HARP program by their bank or other banks and get discouraged that they will not be able to drop their interest rate and payments to today’s low levels until they call us. There are many qualification and eligibility factors that are involved in refinancing your home through the government’s Making Home Affordable Program (HARP).
For more information on General HARP eligibility read: HARP Eligibility
These factors include who actually owns your mortgage (it is most likely not the bank that collects your payments), how much your house is worth verses what you owe (Loan-to-Value ratio), if you have mortgage insurance, and of course the other general loan requirements such as how much you make verses what you pay out (Debt-to-Income ratio), credit scores and how much money you have in the bank (assets).
With all these factors that are taken into consideration when determining eligibility for the HARP program the chance that you may qualify with the bank that you are currently at based on their single set of guidelines is very slim. This is why many people are more successful refinancing their home using a mortgage broker that works with several different banks that have different guidelines that they allow.
Let’s take who owns your mortgage for example. Most loans are actually owned by the GSE (Government Sponsored Entities) Fannie Mae or Freddie Mac. They then select a servicer to collect your payments so your payments might be paid to Bank of America, Citi, Wells Fargo, Chase or other large banks. They collect your payment, keep a percentage for themselves then send the payment to Fannie Mae or Freddie Mac. If your loan is owned by Freddie Mac and your bank doesn’t offer refinancing for Freddie Mac loans then your loan is denied instantly.
A mortgage broker, however, may have several banks that refinance loans owned by Fannie Mae and also have several banks that refinance loans owned by Freddie Mac. The variety of options with such a specific program as the Home Affordable Refinance Program is a huge benefit for a homeowner that want to lower their mortgage payments to today’s low rates.
These days, mortgage brokers are a win-win for borrowers. They offer several refinance programs homeowners and most of the time they are not charged a fee to have the mortgage broker do all of the work. They may even be able to offer no cost loans which are nearly nonexistent by going through a bank.
To get started on a HARP refinance with a leading Mortgage Broker complete the form below and we will be glad to help you review your eligibility and loan options with you at no cost or call us today at 1-800-555-2098.