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By The Irons Team, Debbie Irons | Agent in Lake Nona, Orlando, FL
  • Do I qualify for the new HARP 2.0 Program?

    Posted Under: Financing in Orlando, Foreclosure in Orlando, Credit Score in Orlando  |  February 22, 2012 12:38 PM  |  1,822 views  |  No comments

    The HARP 2.0 REFI PROGRAM for Underwater Homeowner’s


    What is the new HARP 2.0 Refinance Program? 


    The new HARP 2.0 program is intended to help borrowers who owe significantly more on their home than what it's currently worth. It expands on the original Home Affordable Refinance Program, or HARP, which was created to help borrowers who owe up to 105% of their home's market value to refinance their mortgage, and was later expanded to those who owed up to 125%. This newest incarnation, dubbed HARP 2.0, removes the 125% cap, allowing borrowers who are deeply underwater to get a new mortgage at today’s lower interest rates and with more affordable monthly payments.  The program does NOT forgive or reduce principal on your existing mortgage loan.


    How do I know if my mortgage is eligible to be refinanced under this program?


    Only those home mortgages backed by Fannie Mae or Freddie Mac are eligible. Before you call a lender or broker to discuss the program, you should visit both websites below to confirm your mortgage is eligible.  If your existing mortgage is not owned by Fannie or Freddie or if you have already refinanced under a former HARP program, you are NOT eligible for the HARP 2.0.


    Fannie Mae eligibility check - http://www.fanniemae.com/loanlookup/


    Freddie Mac eligibility check - https://ww3.freddiemac.com/corporate/


    My loan is backed by Fannie or Freddie.  What is the next step? Does my credit and income qualify?


    HARP 2.00 guidelines state that prospective buyers are allowed to have had one mortgage late in past 12 months. That late cannot have occurred during the most recent six months.  The buyer cannot have refinanced under an existing HARP program previously. 


    In addition to HARP guidelines, each lender will have to determine their own level of risk.  Lenders are not required to offer this program and there are no government incentives.  The majority of lenders will rely on an automated underwriting system to approve loans.  A minimum credit score may be required and a debt to income ratio of 45% is not uncommon.  The HARP 2.0 will be available for principal residences, second homes and investment properties.  We assume lenders will also use an automated appraisal process to help determine estimated values, although full appraisals will not be required. This is yet to be determined.  The full program will launch in March 2012 and more details are expected over the next 30 days.  Have additional questions? Call us for a free consultation.  We will be accepting applications for the HARP 2.0 program beginning in March 2012.

  • Loan Fees Set to Rise For Conforming Loan Applicants

    Posted Under: Home Buying in Orlando, Financing in Orlando, Credit Score in Orlando  |  March 11, 2011 4:31 AM  |  973 views  |  No comments

    Loan Fees Set To Rise For Conforming Mortgage Applicants

    Leave a Comment Written by Mike Smalley

    LLPA rising April 1 2011Beginning April 1, 2011, Fannie Mae is increasing its loan-level pricing adjustments. Conforming mortgage applicants should plan for higher loan costs in the months ahead.

    If you’ve never heard of loan-level pricing adjustments, you’re not alone; they’re an obscure mortgage pricing metric and, thus, are rarely covered by the media. That doesn’t make them any less relevant, however.

    LLPAs are mandatory closing costs assessed by Fannie Mae and Freddie Mac, designed to offset a given loan’s risk of default. LLPAs were first introduced in April 2009.

    This April’s amendment is the 6th increase in 2 years. LLPAs can be costly.

    In addition to an up-front, quarter-percent fee applied to all loans, there are 5 additional “risk categories” in the LLPA equation:

    1. Credit Score : Lower FICO scores trigger additional costs
    2. Property Type : Multi-unit homes trigger additional costs
    3. Occupancy : Investment properties trigger additional costs
    4. Structure : Loans with subordinate financing may trigger additional costs
    5. Equity : Loans with less than 25% equity trigger additional costs

    Adjustments range from 0.25 points (for having a 735 FICO score) to 3.000 points (for buying an investment property with just 20% downpayment). And they’re cumulative. This means that a borrower that triggers 3 categories of risk must pay the costs associated with all 3 traits.

    Loan-level pricing adjustments can be expensive — up to 5 percent or more of your loan size in closing costs. The fees can be paid a one-time cash payment at closing, or they can be paid in the form of a higher mortgage rate.

    The loan-level pricing adjustment schedule is public. You can research your own loan scenario at the Fannie Mae website, but you may find the charts confusing.

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