Category: Home Affordable Refinance Program

Should I Refinance My Mortgage?

There are several reason why you might benefit from refinancing your home. Many people choose to refinance to simply lower their interest rate while others have goals of doing home improvements or debt consolidation.  Depending on your financial goals, refinancing your mortgage may be a smart choice.

  • Refinance to a lower rate
  • Refinance to a shorter mortgage term
  • Cash Out Refinance
  • Refinance to Drop PMI
  • Debt Consolidation Refinance
  • Refinance a FHA loan to a Conventional Loan
  • Refinance to a Reverse Mortgage

Rate and Term Refinance Loans

A rate and term refinance loan is a mortgage refinance that allows you to change the rate and the term for your mortgage. With this loan type you typically cannot get cash back at the closing.  This the perfect loan type to reduce your interest rate or to pay off your loan more quickly.

Refinancing to a Lower Interest Rate

Refinancing your mortgage to a lower interest rate is the most common type of refinance loan.  The rule of thumb is that if you can recover the costs associated with refinancing by the monthly savings in 3-5 years or less then it may make sense to refinance your mortgage.

With mortgage rates remaining low, there is no reason to pay a high interest rate on your home loan.  Many refinance loans do not even require a home appraisal and may have little to no closing costs.

Refinancing your home loan to drop your interest rate is a no-brainer if you plan on being in your home for the next few years and the monthly savings is enough to make sense for your situation. Ask a loan officer to help determine the time to recover your costs by doing a break even analysis.

Pay Off your Mortgage Quickly by Refinancing to a Shorter Term

If retirement age is just around the corner, you may have a financial goal of paying off your mortgage in the next 15 years. If you are currently in a 30 year mortgage then you may be able to drop your interest rate by going with a 15 year loan term. With the lower interest rates of 15 year mortgages your mortgage payment may stay the same or only increase a slight amount.

The benefit of refinancing to a shorter term mortgage is that your loan would be paid off in a fraction of the time saving you a large amount in interest. You do the math. If you currently pay $1,000 per month for your mortgage but your loan is paid off, that is $12,000 more per year in your pocket! If you save 10 years of payments that adds up to $120,000 which changes your financial picture.

Use our Mortgage Amortization Calculator to estimate the total mortgage interest paid on your loan.

Cash out Refinance Loans

A cash out refinance loan is a mortgage refinance that allows a homeowner to receive cash back from the equity in their home.  Once a homeowner has owned their home for a long enough period to accumulate equity by the increased property values they may have value in their home called home equity.

How can a Homeowner Access the Equity in their Home

To access the equity a homeowner could sell their home and receive the cash proceeds after paying off any mortgages. If a home owner wants to keep their home and get access the equity they have then a cashout refinance may be the perfect fit.

Limitations for Cashout Refinance Loans

Typically cash out refinance loans are limited at 80% loan to value (LTV) for conventional loan or 85% loan to value for FHA however a military veteran can access up to 100% of their homes equity with a cash out refinance.

Debt Consolidation Refinance Loans

A debt consolidation refinance is when a homeowner uses the equity in their home to pay off other debts by refinancing the balance into their mortgage.  This type of mortgage can be used to pay off high interest rate credit cards, personal loans, auto loans or even student loans.  Others may use a debt consolidation refinance loan to pay off IRS tax debt or liens against their property.

The benefit of a debt consolidation refinance would be to lower the overall interest rate and monthly payments of a homeowners debts.  For example if they currently  $1,000 for their mortgage, $300 per month for a credit card and $500 per month for their car loan, they may be able to consolidate their debts into a mortgage and have a payment of $1250 per month. In this example they would bring their monthly payments down from $1,800 per month to $1250 per month for an overall savings of $550 per month. This savings adds up to $6,600 per year!

Refinancing to Remove Private Mortgage Insurance (PMI)

Many homeowners refinance their mortgage to drop PMI, or Private Mortgage Insurance, from their payments. This can be done if you have 80% equity in your home.

Private Mortgage Insurance (PMI) is basically foreclosure insurance that protects your mortgage company in case you do not make your payments. There is not benefit to you as a homeowner having PMI other than it may allow you to initially purchase without a large down payment.

Refinancing from an FHA loan to a Conventional Mortgage

If you currently have an FHA loan then you most likely pay mortgage insurance. FHA requires mortgage insurance even if you were to purchase and place a 20% down payment. With current FHA guidelines, the mortgage insurance never drops off for most FHA loans. For this reason, it may make sense to refinance from a FHA loan to a Conventional Mortgage with no PMI.

Use our Conventional Mortgage Calculator to estimate your new mortgage payment.

How to Drop PMI from your Mortgage

You may need to pay for an appraisal to document your home’s new value as part of the refinance process.  For example, if your home appraises at $100,000 and you only ow $80,000 then you would have $20,000 in home equity which equals 20%.  By refinancing your mortgage with a conventional home loan you would not have PMI on your new mortgage.

Benefits of Dropping PMI from your Mortgage

Dropping PMI could save you hundreds of dollars off your monthly mortgage payments. If you have been aggressively paying down your mortgage balance or if you believe homes in your area have jumped up significantly in value, then speak with a loan officer and review options to refinance and drop PMI from your mortgage.

Other Reasons to Refinance your Mortgage

There are several reasons to refinance your mortgage as shown above. Others may have additional reasons to refinance such as removing a co-signer, changing your loan servicer that has poor customer service, paying down the principal and refinancing to drop the monthly payments, refinancing to a Reverse Mortgage etc. The list goes on!

To review all the benefits of mortgage refinance programs we suggest that you speak with a licensed loan officer. They will help to determine your financial goals and provide information on refinance options to accomplish your goals. Riverbank Loan officers are standing by to help at 800-555-2098 or you may request information by completing the short form below.

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The Mortgage Process: What Happens After Pre-Approval

Congratulations! You passed the pre-approval stage for getting a home, but what happens next?

Once you have a pre-approval letter from your lender, you can start looking for a home to purchase. Keep in mind that the letter is only good for 60 to 90 days, depending on the type of approval you received.

Why Should I Get Pre-Approved?

A pre-approval gives you an edge when shopping for a home because realtors and home sellers know you are already qualified to buy, according to a lender’s standards. It also means your time from agreeing to buy and closing will be faster, since approval is already done. During your search, keep the lender estimates in mind. It is an amount you can comfortably afford for a home. It is not advisable to go above it.

Once you have found a home that meets your needs and your pre-approval amount, you can start the sale process by giving the seller the pre-approval letter and making an offer on the house. If the seller accepts your offer, the next step is to start the underwriting process.

 

What is the Mortgage Underwriting Process?

Now that you have an accepted offer on a house, you will work with your loan officer to sign an official mortgage application. This will start the loan process and allow us to submit your application to underwriting for approval. If you have not yet provided the supporting documentation to verify the information on your application you will need to do this now. These documents will include income, assets, and credit documentation.

Required Documents to Apply for a Mortgage

  • Drivers License
  • Social Security Card
  • 1 Month Paystubs
  • Most Recent 2 Year W2 Statements
  • Most Recent 2 Years Tax Returns (if self employed or commission)
  • 2 Months Bank Statements
  • Most Recent Quarterly Retirement Statement
  • Home Owner Insurance Quote

(Additional Documentation may be required in Underwriting. Not all borrowers will need to present these documents – Ask us about our Automated Home Loan process where we electronically verify your information.)

Once your application is signed (we use electronic signatures to speed up the process), then your loan is submitted to an underwriting. The underwriter will review the information to confirm that it matches what was submitted on your application. They may have questions or request additional documentation at this time. Once your loan is “Conditionally Approved” in underwriting we will move to the appraisal.

What Happens During the Appraisal Phase?

An appraisal takes into account the interior of the home, the exterior, and the value of surrounding homes in the neighborhood. Once the appraisal is over, the loan can be processed. An underwriter will process the loan and clear the loan for closing. The appraisal must come in either greater than or equal to the value of the purchase price. If it comes in low you may need to bring additional cash or renegotiate with the sellers.

Once through processing, your loan will be scheduled to close. This is where you will sit down with an escrow agent or a notary to make everything official and legal. 

The Final Stretch: Closing Costs

The last part of the process, before you can start packing up your moving boxes, is the closing. Closing costs are what you pay for outside of the home itself. So, if you get an appraisal, the appraiser needs to be paid for their services. In addition, there is title insurance fees, taxes, tax services, and other fees that come with closing. These fees can range anywhere from 0-5% of the cost of the loan. 

If you negotiated that the sellers will pay these closing costs and pre-paid items then they will cover them at the closing otherwise these fees will need to be paid by you at the time of the close. If you are short on cash, ask your loan officer if you qualify for lender paid closing costs. This is where we will give you a credit at the close to cover some or all of your 3rd party fees. You will always need to cover your own down payment funds (unless a special program allows differently).

In summary, to start buying a home, the first step is the home loan pre-approval. Be sure to make an appointment with a Riverbank Finance professional loan officer today by calling (800) 555-2098.

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Will changes to HARP hurt or help mortgage seekers?

If you’re seeking to refinance after October 1, 2017, you should know there are some changes coming from Freddie Mac regarding HARP. HARP, or the Home Affordable Refinance Program, is in the waning years of its existence, which is a good thing. How Freddie Mac is changing, in relation to HARP, could be a benefit to those seeking to refinance.

History of HARP

Back during the 2008 Housing Crisis, there was an overabundance of homes that were going under and being repossessed. One reason was because homeowners, who had a home with a LTV (Loan to Value) of over 80%, couldn’t refinance.  Because they still owed 80% or more of the loan, no lender would allow them to refinance. So they were stuck paying a big loan with huge interest rates.

Enter HARP. Harp allowed these homeowners a chance, through Freddie Mac, to refinance their loan and get a lower interest rate with more affordable payments. This allowed homeowners who were in over their heads with their mortgage a solution that didn’t cost their home.

Why the Change?

HARP was never created with the intention of staying around forever.  In fact, one requirement of HARP was that the loan had to be older than 2009 for the homeowner to qualify. Since then, the number of applicants has dwindled, as there are fewer mortgages from before that period in need of HARP.

The good news is both Fannie Mae and Freddie Mac are starting new programs to help homeowners who are underwater with their mortgages. No program existed before 2008. Since then, the government has seen the value in allowing more homeowners options to keep their homes.

Freddie Mac is replacing HARP with what is being called the Relief Refinance Mortgage. One key difference is that there is no requirement that the loan must originate before 2009. So if the loan is more recent, a homeowner can take advantage.

Do you Qualify?

Homeowners could qualify for a Relief Refinance Mortgage if they meet the following requirements:

  • The mortgage must be at least 15 months old.
  • The borrower should not have any delinquent payments in the past six months.
  • They can only have one delinquent payment in the past year.

 

Keep in mind, those three requirements aren’t the only ones, but they are the biggest obstacles to qualifying for the Relief Refinance Mortgage, according to Freddie Mac. Homeowners who do meet those qualifications can contact a Riverbank Finance Loan Officer (1-800-555-2098) for more information about getting relief in the form of a refinanced mortgage.

 

Loans for Veterans

Three years after the Civil War ended, Memorial Day was established to honor our veterans on the last Monday of May every year. But that’s not the only thing the US Government has done for veterans. Started in 1944, the VA Loan program makes the burden of getting a mortgage easier for qualifying veterans and surviving spouses.

No Down Payment Mortgage

One hurdle home buyers often face in getting approved for a mortgage is the seemingly insurmountable down payment. However, if you’ve served our country in the armed services, you don’t need a down payment! Traditional mortgages can require up to 20% for a down payment. That is a potentially huge weight off a buyer’s shoulders!

It Gets Better for Veterans

VA Loans have other added advantages over conventional financing. The loans are backed by the US government. That benefit is especially helpful for veterans with bad credit. A buyer can have a credit score as low as 580 and still get approved.

Another benefit of the loan being government-backed is that it doesn’t require private mortgage insurance (unlike FHA loans). Any other kind of loan, with less than a 20% down payment, must have Private Mortgage Insurance. PMI protects the lender in case of a default, but in a VA Loan, the government acts as the insurance.

Use our VA Mortgage Calculator to estimate monthly payments.

Sign Up, Soldier!

So how do you get a VA mortgage? The first step is to get a Certificate of Eligibility from Veterans Affairs (We can do this for you with a quick phone call), to show that you are eligible for the program. Once the certification is received by a loan officer and processed (most are instant however manual COE’s can take 5-10 business days), the loan goes for pre-approval. You could qualify for up to a $453,100 loan. Your dream home might be more within reach than you think.

Riverbank Finance offers both 15 and 30-year VA Loans. We can review the benefits of both VA loan terms to find the right fit for your family. Apply for a VA Loan online or in person at our office. Our offices are also handicap accessible making it easy for disabled vets.

VA Refinance Loans

If you already own a home and qualify for a VA Loan, you also can benefit from refinancing through VA Loans. Like other VA Loans, this program was set up with easier qualifications and benefits than a traditional loan. For refinancing, this means that you can cash out up to 100% of the value of your home. So if you haven’t taken advantage of VA Loans in the past and have a remodeling project you’ve been putting off, now is the time. These are benefits you earned for serving our country. Use them!

We, here at Riverbank, are thankful for our armed service members. We feel honored every time a veteran seeks a loan through our services and strive to make the process as easy as possible.

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Waiting to Buy a Home in West Michigan?

5 reasons why not to wait to buy a home

5 Reasons Why You Shouldn’t Wait to Buy

Timing can mean the difference between getting a home at a good value or missing out completely. Right now, the West Michigan housing market is red hot. If you are thinking about buying a house in West Michigan, here are five reasons you shouldn’t wait much longer:

1) The growing economy.

Grand Rapids has entered a new life outside of its history as a rust-belt city. Currently it is listed at 31st in Forbes Best Places for Businesses and Careers. Unemployment is at 3% with jobs growing at a rate of 2%. That growth, in turn, means homes purchased in the region will increase their worth as investments.

2) Increased demand for homes.

In 2016, Grand Rapids ranked third for housing shortages, according to the National Association of Realtors. Forbes Magazine forecasts that 2017 will be similar to last year in terms of housing demand. Last year, homes averaged 52 days on the market. Experts believe the window of opportunity will be even shorter in 2017. Securing your mortgage is key, so you can get the home you want before it’s too late.

3) Interest-rate increases.

The Fed increased interest rates in March 2017 for only the third time since the 2008 financial crisis — and there’s no sign the rates will decrease again anytime soon. In fact, the rates may increase again before the year is over. Currently, the National Association of Realtors averages nationals rates at 3.39 percent for 15-year mortgages and 4.14 percent for 30-year mortgages. To see what kind of rate you could get for a mortgage, try our mortgage rate calculator.

4) Deregulation.

The Trump Administration has moved toward rolling back the Dodd-Frank Act, the Obama-era federal reform legislation that put the government in charge of regulating the financial industry. Trump’s financial deregulation may benefit mortgage seekers by loosening restrictions on lenders. Home buyers would be able to secure loans easier, but it would mean the pool of available home buyers would likely increase.

5) Options for imperfect credit.

If your credit is imperfect, options are available that could help you buy a house anyway. FHA loans require a 580 credit score with a 3.5% down payment. However, you can still get an FHA loan with a credit score between 500 and 579 with a 10% down payment. Another option is asking a friend or relative with a better credit history to co-sign on your loan. Just be careful about co-signing, because you could strain your relationship with the person if you run into any financial trouble. Other than FHA and co-signing, you can always pay down your debt, decreasing your debt-to-income ratio, or find a way to increase your housing-to-income ratio.

Given the rise of interest rates, a high demand for homes, and a potential ease in mortgage regulations, 2017 is shaping up to be another year when demand will outpace the available supply of homes. So, the longer you wait, the less likely you are to get the kind of home you want within your budget.

To start the process now, check out our pre-approval page or contact one of our mortgage loan officers for more information at 1-800-555-2098.

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Refinance Your Home Without an Appraisal

Refinance Your Home Without an Appraisal

Soon, homeowners will be able to refinance their homes without an appraisal! Beginning December 10th 2016, Fannie Mae will offer an Enhanced Property Inspection Waiver (PIW) for ONE-IN-FOUR transactions.

What is a Property Inspection Waiver?

A Property Inspection Waiver is Fannie Mae’s offer to waive the requirement for an appraisal on certain refinance transactions. It is unclear at this time whether or not purchase transactions will be offered a PIW, but more information will be released as the launch date approaches.

“When a DU loan casefile receives a PIW offer and it is exercised by the lender, Fannie Mae accepts the value estimate submitted by the lender as the market value for the subject property.” -Fannie Mae

To exercise a PIW offer, the lender must provide a Special Feature Code and the borrower must pay a $75 fee at time of loan delivery to Fannie Mae. This $75 PIW fee provides a desirable alternative to traditional appraisals, which carry an out-of-pocket cost of $400-$600 to the borrower.

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Related: Refinance your FHA mortgage without an appraisal 

What is the Benefit of a Property Inspection Waiver?

The Enhanced PIW provides many benefits to both the lender and the consumer, such as:

  • Provides a lower-cost alternative to a traditional appraisal
  • Shortens the loan origination process by removing the need to review an appraisal
  • Eliminates the expense of appraisal-related delays

Who Will Receive a Property Inspection Waiver?

Fannie Mae will use proprietary analytics and a large database of appraisal reports to determine the minimum property value for new loans. Not all transactions will receive a PIW offer—some will still require an appraisal to determine market value.

“PIW offers are issued through Desktop Underwriter® using Fannie Mae’s database of more than 20 million appraisal reports in combination with proprietary analytics from Collateral Underwriter® to determine the minimum level of property valuation required for loans delivered to us.” -Fannie Mae

What Transactions Are Eligible for a Property Inspection Waiver?

  • Single-Family Properties and Condominiums
  • Principal Residence, Second Home, and Investment Properties
  • Limited Cash-out Refinances up to 90% LTV (principal residences)
  • Cash-out Refinances up to 70% LTV (principal residences)
  • Approve/Eligible Casefiles

Have a specific scenario you’d like to run past us? Give us a call to speak with one of our licensed loan officers. We would love to recommend the best loan program for you and your situation.

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To apply for a Renovation Mortgage or Refinance call Riverbank Finance today at 1-800-555-2098.

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How to Refinance a Home Loan

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Want to save money on your mortgage? Refinancing might be the best way to take advantage of the historically low rates. Depending on your goal, make make great financial sense to refinance your mortgage. Here’s what you need to know to make the best decision.

Benefits of Refinancing your Home Loan

Before you refinance your home loan, it is important to determine your financial goals. Do you want a lower interest rate? Do you want to change your adjustable rate mortgage to a fixed-rate mortgage? Do you want to pay off your loan in 15 years instead of 30? Do you want to lower your monthly payments? Did you know you can also refinance to consolidate a first and second mortgage? You can also extend your current loan to cash out if you want to start a business, help a family member in financial crisis, or go on an expensive vacation.

Do the math.

Ask your loan officer to help you figure out how much refinancing will cost you, and how much you’ll save over the long term. If refinancing will save you $200 per month, but you have to pay $2,000 in closing costs, you’ll break even in 10 months. How much longer do you plan to stay in the home? If you plan to stay there for more than 10 months, refinancing may be a good idea. If you’d like to move out sooner, the costs associated with refinancing may not be worth it. Also, if you lower your interest rate but extend your loan from a 15-year to a 30-year, you’ll lower your monthly payments but end up paying more interest over the life of the loan.

Talk to a loan officer to review your mortgage refinancing options.

If you decide refinancing is right for you, start by calling loan officer. He or she may be able to save you on closing costs and other fees by recommending a loan program specifically for your situation. Before you start the process it is important to do your research to find the best loan option to meet your goals. Do not just settle for what your current bank offers just because you have a car loan or checking account there; let your lender know that you’re shopping for mortgages so you can make an informed decision and perhaps he or she will find a way to offer a better deal.

Know your refinancing options.

Find out if you are eligible for any special refinance programs that may benefit you over the standard refinance mortgage. For example, if you currently have an FHA loan, you may qualify for an FHA streamline refinance, which would allow you to refinance with no appraisal, no income, and little to no closing costs. If you currently have a conventional mortgage, you may qualify for the Home Affordable Refinance Program (HARP), which may allow you to refinance, regardless of your home’s value, with no out-of-pocket costs.

Expect to gather documentation and paperwork.

Refinancing your home loan is a process that usually comes with a significant amount of paperwork to document your income assets and passed credit. Do not be overwhelmed by the request for documents with the current laws and underwriting guidelines. Even those with perfect credit have to provide the same documentation to get a home loan or mortgage refinance.

When you work out the details of your refinance mortgage, your loan officer will help you navigate the steps from initial loan consultation to closing. Be prepared to provide documentation, including driver’s license, social security card, one month of paystubs, two months of bank statements, past two years of W-2 statements, and your current mortgage statement.

Once you sign your application and send in the documentation, your loan officer will send in your file for underwriting, which may require additional documentation. You may also be required to complete a home appraisal. When you’re finally approved in underwriting, you’ll be cleared to close. Your loan officer will review the final figures, you’ll have to pay closing fees and documents, and then the process is complete.

Steps to Refinancing your Home Loan

1) Initial Mortgage Consultation
2) Sign application
3) Send required documents – (drivers license, social security card, 1 month paystubs, 2 months bank statements, past 2 years w2 statements, current mortgage statement)
4) Underwriting Process
5) Complete the Appraisal (if required)
6) Clear to Close – (once fully approved in underwriting your loan will be “Cleared to Close” and scheduled for closing)
7) Meet for the Home Loan Closing

For more information about what Riverbank Finance offers for refinancing, schedule an appointment with one of our loan officers by calling 800-555-2098 or fill out our online refinance application or by completing the form below.

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Top 9 HARP Refinance Myths for Fannie Mae and Freddie Mac Home Loans

Harp mortgage refinance program.With over 2.9 million homeowners refinancing with the Home Affordable Refinance Program (HARP), there are still many people that are not taking advantage by refinancing their homes. There is a variety of reasons in which these homeowners are choosing not to drop their home loan rates with a mortgage refinance. Many of these reasons are simply myths or assumptions that are made based on their prior knowledge of the refinance process. Tracy Mooney, Vice president of Single-Family Servicing and Real Estate Owned (REO), has taken the time to publish an article debunking these top HARP Myths.

HARP Myth 1: I’ve had my loan for many years, and with HARP I’d have to start all over again with a 30-year mortgage.

Answer:  This is incorrect. Borrowers that have had a conventional loan for several years are able to do a HARP refinance and shorten their term. Many borrowers choose to go with a 15 year or 20 year loan and reduce their interest rates while taking several years off their mortgage. A borrower may be able to accomplish this and keep their payment the same as their current 30 year mortgage.

HARP Myth 2: I’m receiving too many solicitations to help me refinance. They must be scams.

Answer: There are several mortgage companies and banks that offer HARP refinancing so these offers may all be legitimate. It is important to note, however, that not all banks and mortgage companies are equal. Most lenders have overlays on top of HARP Eligibility Requirements that prevent them from doing the refinance loan. If you have tried one company and been turned down, it is recommended that you check with another company that may offer programs such as unlimited LTV loans, lower minimum credit scores and both Fannie Mae HARP mortgages and Freddie Mac HARP Mortgages.

HARP Myth 3: I am really underwater on my mortgage. HARP can’t be for homeowners like me.

Answer: HARP has been updated several times since its inception in 2009. Currently both Fannie Mae and Freddie Mac loans allow for unlimited Loan-to-Value (LTV) refinancing. As noted previously, most banks and lenders have overlays and limits for their LTV. It is important to find a mortgage lender that offers higher level LTV refinances for homeowners severely underwater on their home loan.

HARP Myth 4: I recently lost my job, so no one is going to help me refinance through HARP.

Answer: If you have recently lost your job you may still be able to get a lower rate with HARP. Your current mortgage servicer may allow for a HARP Refinance without income in some situations but most lenders will allow you to income qualify using a co-borrower. One of the original borrowers must remain on the loan to qualify. The combined income is what will be used to calculate the Debt-to-Income (DTI). Alternatively, if you have available funds equal to at least 12 months of principal, interest, taxes, and insurance, then you may be eligible without proving income.

HARP Myth 5: My lender doesn’t offer HARP, so I can’t refinance through the program.

Answer: Yes; you may be eligible to refinance through any other mortgage company that offer the HARP Mortgage Program.

HARP Myth 6: My lender doesn’t offer HARP, so I can’t refinance through the program.

Answer: Yes; you may be eligible to refinance through any other mortgage company that offer the HARP Mortgage Program.

HARP Myth 7: I have an adjustable-rate mortgage (ARM), so I am not eligible.

Answer: HARP was created to offer more stable and sustainable mortgage options for homeowners in your very situation. Speak with your loan officer about fixed rate mortgage loans to have long term stability in your payments. Alternatively, you may utilize HARP to extend your adjustable rate mortgage (ARM) for an additional 5 or 7 years at lower rates.

HARP Myth 8: I don’t have enough cash to pay closing costs, so I can’t refinance through HARP.

Answer: Event with a HARP refinance, you may be able to refinance with little or no money out of pocket.  For many homeowners, you may be able to roll any closing costs and pre-paid items such as taxes and insurance into your new mortgage. Some lender may also offer options to credit back money to help cover the expenses of closing costs so you truly have a no cost mortgage. Be sure to speak with your loan officer to review what loan options you are eligible for through HARP.

HARP Myth 9: HARP is only for homeowners who are behind on their payments and in danger of foreclosure.

Answer: The Making Home Affordable program offered two home loan solutions for borrowers that were at high interest rates and were previously unable to refinance. The Home Affordable Modification Program allows homeowners that were behind on their loan payments to apply for a modification of their current terms to allow them to save on their payments. This is commonly confused with the Home Affordable Refinance Program (HARP) which is for clients whom have paid their payments on time and would qualify for a conventional refinance if they did not owe more than their house was worth. The HARP program is for borrowers with good credit that simply want to lower their interest rate and payments.

For more information on the HARP refinance program call a licensed loan officer at Riverbank at 800-555-2098 or request information below:

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HARP Refinancing Reduces Monthly Payments

harp mortgage refinancing savings.

Refinancing volumes remain high for the Home Affordable Refinance Program (HARP). With media spreading the word to homeowners that are paying high rates, many homeowners are benefiting from the HARP 2.0 program updates.

HARP 2.0 Home Affordable Refinancing

The Home Affordable Refinance Program (HARP) was announced by the Obama administration near the end of 2009 as way to stimulate the economy and allow more money to flow into business.  The Federal Reserve also started purchasing Mortgage Backed Securities (MBS) to also allow mortgage rates to fall.  This helped to create the prefect refinancing environment for the average homeowner.

The benefiting of HARP refinancing is mainly that the program allow more flexibility to homeowners that have lost value in their homes due to falling home prices, foreclosures and shortsale. Without a major push from the Obama Administration, underwater refinancing would have been impossible.

Since the inception of the Home Affordable refinance Program, there have been more than two million U.S. homeowners that have been able to benefit by refinancing to lower interest rates regardless of their home’s value. The HARP program has been considered a very successful refinancing program which has sent the housing markets back on track to stability.

HARP Refinancing Reduces Monthly Payments

When HARP was announced, mortgage rates were hovering from 5.875% to 7.25% for a prime conventional borrower. Since the announcement of HARP, mortgage rates have fallen more than 2 percent from their recent highs allowing for substantial monthly payment reductions.

For example, if we were to compare a typical mortgage prior to the HARP program to the mortgage interest rates for a typical HARP refinance we would see significant monthly savings.

A 30 year fixed mortgage with a Loan Amount of $200,000 at 6.75% would give a homeowner a payment of $1297.20 per month. After a HARP refinance, if the homeowner were able to drop their mortgage to 4.75% the new mortgage payment would be dropped down to $1043.29 per month. This equals a savings of $253.91 per month or $3046.92 annually.

The aforementioned example clearly shows how significant the HARP refinancing savings can be for the average homeowner.

**NOTE: Rates and terms may vary based on each individual’s situation. Above example is for illustration purposes only and assumes a 100% or less loan-to-value, 740+ credit, and $200,000 loan amount for a 30 year fixed rate mortgage. Not all will qualify, call a loan officer at Riverbank Finance for additional information and details on programs based on your situation.

Apply for a HARP Refinancing

There are many factors that determine eligibility for a HARP refinance such as mortgage date, loan holder and income qualification. If you believe you are HARP mortgage eligible then it is important that you act fact. The program is set to expire and mortgage rates are on the rise.

Fannie Mae and Freddie Mac do not refinance mortgage loans directly. To apply for a HARP refinancing mortgage you must contact an approved mortgage company such as Riverbank Finance LLC.  While many people decide to call their current mortgage servicer it is important to note that not all programs are the same.  Many banks and lenders add unneeded restrictions making it harder to qualify for a HARP refinance.

With current HARP refinancing guidelines homeowners may be able to qualify with no appraisal and little documentation. We would recommend calling us today at 800-555-2098 or requesting information below to determine eligibility.

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FHFA EXTENDS HARP REFINANCING THROUGH 2015

Federal Housing and FInance Authority

The Home Affordable Refinance Program (HARP) has been extended again and will no longer expire on the original date of December 31 of 2012. Federal Housing Finance Agency (FHFA) has announced the extension of the program designed for homeowners that have been unable to refinance due to their underwater mortgages.

The extension was announced to continue the damage control and efforts to reduce losses for Fannie Mae and Freddie Mac, the government sponsored entities that were bailed out following the economic collapse.

What is the Home Affordable Refinance Program (HARP)

HARP was created through an announcement from the Obama Administration near the end of the year in 2009. The programs allows homeowners with mortgages owned by Fannie Mae and Freddie Mac to refinance to lower interest rates even if they owe more than their home is worth. The program supports high loan-to-value (LTV) ratios and requires limited documentation for homeowner to qualify. Many times an appraisal is not required for a HARP refinance.

When does the Home Affordable Refinance Program expire?

Following the announcement form the Federal Housing Finance Agency (FHFA) the HARP program will now expire on December 31st, 2015. The two year extension of the Home Affordable Refinance Programs is expected to allow millions more homeowners to reduce their mortgage payments to the current historically low rates. Since the program’s inception in 2009, HARP refinancing haw allow over 2 million borrowers to drop their rate and terms.

“More than 2 million homeowners have refinanced through HARP, proving it a useful tool for reducing risk,” said FHFA Acting Director Edward J. DeMarco. “We are extending the program so more underwater borrowers can benefit from lower interest rates.”

Due to the overwhelming success of the HARP program, HARP 2.0 was announced removing LTV requirements and making qualifying easier. Since HARP 2.0 announcement in the fall of 2011, more banks and lenders have expanded their guidelines and allowed HARP refinancing for their current loans.

Apply for the HARP refinance program

Contact the experts and knowledgeable mortgage officers at Riverbank Finance today to check out the latest mortgage rates and have your questions answered about HARP today.

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