HARP loan program has been a dismal failure Examiner.com
The HARP loan refinance program, which was supposed to have aided four to five million home owners with a streamlined refinance of their existing mortgage has been a dismal failure.
The HARP (Home Affordable Refinance Program) program was designed to help those with loans owned by either Fannie Mae or Freddie Mac, but underwater, refinance their mortgages to lower prevailing mortgage rates. The program was rolled out in April 2009 with lots of anticipation that this program would free up cash for those home owners and help the economic recovery.
The guidelines, that this program was only for those whose loans were owned by either Fannie or Freddie (and therefore were presumed to be the strongest borrowers) were initially rolled out with a lot of pomp as a fix for homes that were losing value. The problem, as with so many government rolled out programs, is that participation by lenders was voluntary, and that lenders had autonomy in how the guidelines were interpreted, and which guidelines they could follow, and which they could ignore.
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Paid off 1st mortgage. Owe 90000 on a 2nd mortgage/home equity loan. Should I pursue a new loan to refinance?
I am 46 years old. My husband is 50 years old. The rate is 9.25%.
You owe $90K on a 9.25% loan and are asking if you should refinance?
YES, YES, YES.
Your currently paying around $693 a month in interest.
Current mortgage rates are around 6.25%. A 3% savings. At 6.25% your monthly interest would be around $468.
We are looking at a savings every month of about $225.
The general rule is if it takes more then two years to see a return from the refinancing, you should step back and reconsider the expense.
In your case, refinancing would probably cost around $1000, which you would start seeing a return in 5 months.
Refinance, get rid of that 9.25% interest, and start saving a ton of money in interest.
That's really hard because of the situation. It depends on a lot of different things; do you need cash to cover debt, or are you planning on retiring within the next 10-15 years. It makes sense to just pay off your 2nd as much as possible, but equity in your home is dangerous because it's not liquid.
If it were me, I would refinance everything and do an interest only, or pick a payment loan... that way I would not be sending all my money to the banks, but I'm still very young and have a lot of time ahead.
Just remember, you should always be saving money on the side.
- Credit score & history
- house value
- income
With that rate, I would check. I just did a refi at 6.75%. That would save you a large chunk of money.
great rates and no middlemen! and straight answers
Can someone please tell me the difference between a 2nd mortgage, home equity loan and refinancing?
Yes. Home Equity Loans are more like credit cards and affect your credit that way. They are also almost exclusively adjustable rates. HELOC's are generally available "for free" from most major banks. Know why it's free? Because they are going to make a TON of money from you as long as you have the loan.
A second mortgage is treated like a mortgage on your credit (better than a credit card). The rates will be higher than a refinance. You must, like a HELOC, have available equity to get a second loan.
A refinance pays off the existing first and second mortgage (usually) and any other debt so long as the value is there in the home. Some people refinance to pay off other more expensive debt but that usually is not a wise decision. You do not need to have equity in your home if you qualify for a full value refinance.
When you refinance you replace the mortgage (usually the first mortgage) with a new loan.
Home Equity Loan = A loan obtained by mortgaging the equity in your home. Can be term or open end credit and either a first or second mortgage, depending on whether a current mortgage is in place.
Refinance = The act of satisfying and replacing an existing loan with a new loan. You can refinance and get a home equity loan for instance.
If you've no mortgage and you get a home equity loan then you've just acquired a mortgage.
Refinancing is when you get a new mortgage to pay off one you already have. Usually at a lower interest rate or to stop an ARM loan from killing your pocket book.
Refinance mortgage loan?
I have 2 loans for my condo because i don't want to pay PMI. My 1st loan is 80% (fixed) and the 2nd loan is 10% (adjusted). My condo value went up roughly 12%. Can I refinance my 2nd loan for a fixed rate, even though I haven't paid off 20% of the loan?
Yes you can all you have to do is contact your mortgage broker/bank and do an increase and blend on the mortgage that is at 80%.there might be a penalty on the smaller amount to discharge it but the lower rate on the first mortgage should offset that and now you will have one payment that will be lower tha the other 2 combined or even lower if you increase the amortization.
Let's look at an example. Say your condo was purchased for $400,000, and has since then gone up 12%. The new value is $448,000. You have a 1st mortgage of $320,000 and a 2nd mortgage of $40,000.
Because your new value is $448,000, you can refinance both loans and open a new single 80% loan-to-value loan at $358,400. Of course your existing liens are $360,000, so you would have to come in with some cash for the difference and money for closing costs, but you could settle into a single fixed loan and eliminate your 2nd this way.
Possibly you'd be able to get a bit more value out of your property beyond 12%, and then you could refinance the loans into a single loan without bringing money in.
Alternatively, you could refinance just the 2nd mortgage based on the new value. But it would probably be wiser to stick with a single loan at a lower fixed rate.
It also depends if you plan on staying in the property for an extended period of time. And how much money you have on hand. Also note that if you have an equity line 2nd mortgage, it likely won't go up as the fed has paused the prime rate, and many industry experts feel the next move will be to lower prime. Of course if the rate on your 2nd mortgage is quite high, you should refinance out of it.
Matt
http://www.diversifiedlender.com/
http://www.minnesota-mortgage-rates.net/
Just remember you will have closing costs associated with your loan again (ok).
Also check and see if you have a pre-payment pentality associated with your loan, and if so how much that may be? Look at your mortage note, and any riders associated with your mortgage (you got them at the closing table).
Regards,
Steve
Should I raise the equity limit on my second mortgage loan or just refinance?
I want to purchase a home in San Diego, but I have limited income. My current first loan (70,000) is a VA loan, and I have a second ($3000). I only have $5000 on hand for a down payment. I could raise the limit of my 2nd mortgage loan in order to get enough for a down payment. Or should I refinance the loans into a conventional loan in order to use my VA loan? My current home is valued at 154,000. Should I take cash out so I can give a bigger down payment? Or should I just sell the home? If I did sell the home for 150,000, (I have been in the home for more than 5 years) how much would I keep after all the fees?
I can tell you more if you describe your situation in a little more details. First, why you want to buy a house in San Diego? Rental or vacation home? If it is for rental, that make sense. Second, how much interest rate you're paying on your 1st and 2nd mortgage? If refinancing can get you a lower interest rate plus cash out and will keep your mortgage payment about the same, that's the best and make sense to do so. If you want to move to San Diego and sell your current home, you probably don't need to pay any capital gain cos' you have $250K tax free on your own house. Add the potential rental income and do some more calculation to find out the best way to afford two houses mortgage.
Can you refinance a 1st mortgage and 2nd mortgage without equity?
I own a single family property in IL. I have a 1st mortgage that was 100% LTV that was used to purchase the home and a 2nd mortgage that is a 120% LTV that was used to consolidate debt. The value of the home is about $40,000 short of what I owe based on both loans. I want to refinance my 1st mortgage which is at a rate of 7.25%. Is this possible?
you would have to create equity by putting up the the differance plus probably a bit down as well, looks like that would be a bit of a hefty sum
If anyone offers to do it for you run away fast, they are liars.
Go to http://www.MyMortgageSaver.com to have a local mortgage broker contact you.
Good Luck,
Jon
When to refinance and what to do with 2nd mortgage?
Bought home in October of 2006.Bought it with no money down. Did 80/20 Loan: 1st Loan 7.125% 2nd 10.5%. Interest only 5/ARM. Price was $584000 In the Los Angeles area.
Bought Home below market value, houses around my area are selling for $650K and up.How soon can I refinance to a fixed rate and what can I do about the 2nd mortgage in order to avoid getting a Jumbo Loan rate and having to pay PMI?
Please, before you go any farther, look at your Mortgage Note, and any and all riders associated with your property. You got (I am sure) a big package at the closing table in October. Look them over carefully for a pre-payment pentality. You may have one and if so, what is the percent. If it is 2 percent based over a 2 yr period or a 3 yr (which is normal) broken down over a 3 yr like a 3-2-1 percent.
2nd you would have closing costs associated with your loan again. If you do refi, than contact the title company you recently used and see if you can use them again, since you already have had title insurance with them, and they would still have all your information on file. That may save you $$$$.
3rd, since you are in a interest only now - nothing has been paid on your mtg. And you have only paid 1 payment on the interest (if it was due in December). A new lender will want to see the mortgage history - - and you may have a seasoning issue on having to use the orginal appraised value vs. the new appraised value. So lenders will require you to be in the property 6 months, and others 12 months....to go off the NEW appraised value. If I were you, I would wait 1 yr (12 months) of payment history to be reported (Or at least 6 months) to go off a NEW appriased value.....Values may go up even more in 4 months time, in the Los Angeles area.
Based on the informaiton you mentioned, you could in 4 months (best if it is 6 months) have a appraisal done (after you get qualified) for a 617,500 loan (That is 95 percent of 650,000). That would pay off your first and 2nd, if you do not have a pp (Pre-Payment). You could even call your Lender and see if you have a PP. But check your paperwork (ok).
If your credit is good, and it sounds like it is, than a 6.125 on a JUmbo is not unheard of with a payment of $2,534
Go to: www.interest.com or www.rates.interest.com
National Mortgage Rates
12/18/2006 8:48:31 PM
APR Rate
30 Yr Fixed Jumbo 6.11%
15 Yr Fixed Jumbo 5.90%
Good Luck - the Loan Process can be fun - at least I love being a Broker, getting to help my clients is rewarding to me. Find a Broker who cares and will go over the full loan process with you and be in contact with you daily. The one on one customer service is important, to you, the client, to let you know the whole loan process
not a problem, if there is enough appreciation to do 80% in the first based on current valuation ... otherwise may be a problem juggling paying off and simultaneously refinancing both ... unless you can get another hybrid pair.
also ... with respect to timing ... be sure you are aware of any prepayment penalties in your existing loans ... and consider the impact of any points on either the old or the new loans ... fees and points can eat up the economics pretty quickly
Of course you can refinance your first loan, to get a fixed rate. But how long are you planning to stay in the home? You've only bought the house 2 months ago. If you're not sure, I wouldn't refinance yet. You'll just end up paying brokers fee twice. And even if its a "zero point, zero cost" loan, that cost is still gettiing rolled into the back and it WILL cost you money.
Your loan is a fixed rate for 5 years, I would suggest try to wait until (a) you can pay off some of that 2nd loan and/or (b) your property price increase, before you refinance.
1st/2nd mortgage loans; paying off just one?
i wanted to pay off only the 2nd mort (home line of credit) and my friend told me that both loans gotta be paid at a same time or something gets violated etc. i don't get it. i wanted to pay off 2nd loan and refinance with 1st (big) loan to match my current value :(
he said i should put down the money to refinance etc. i'm confused now. what's the deal...
Your friend doesn't know what he's talking about. You can pay off the second anytime you want. I've never seen a second lien with a prepayment penalty--they're illegal in most states. You don't necessarily need to put money down to refinance, but there will be costs involved (closing costs). Those are usually rolled into the new loan. Usually the only out-of-pocket expense for you is the appraisal--about $325.
Rick
http://www.fairwaymortgagelending.com
But if you refinance the first loan, that loan will be repaid with the money you borrow with the first loan. Put another way, if you are refinancing the first loan, both loans have to be repaid.
Refinance a traditional mortgage and 2nd mortgage?
Can I refinance my 2 loans together. I have a traditional and a 2nd. Should I just refi one or the other?
This depends on a few things.
Is the combined loan balance less than 80% of your homes market value?
Is your credit as good or better than when you took out the loans?
After you figure in all the additional fees and costs, is it worth it?
If you are going to refi, the best place to go first is to your current mortgage holder and see what they can do. If you have been a good customer they won't want to lose you and may cut you a great deal.
Beware of these independent brokers as they are a huge part of the problem and are still breaking the law to keep their own butts in money.
Good luck.
If I want to combine my 1st and 2nd mortgage what type of loan would that be?
If we refinance and combine our 1st mortgage and our home equity line, what type of loan is that called. I don't want to call a mortgage place right now because they will run our credit and all that stuff. Also would we qualify for the low rates that are being advertised if we have good credit?
a second...
Bad Credit Mortgage Refinance in Australia?
I am trying to refinance my existing home loan, plus a 2nd mortgage as well as a number of other loans, cards etc. I do have 2 defaults on my file, one paid and one unpaid. Has anyone been in a similar situation and how did they refinance
Though refinancing your home loan to get extra cash and pay off your credit card debt might be a good idea. It is not the best solution. This serves best the credit card interests and not yours. Because even if you get your debt settled and eliminate it for good, if you don't change the way you spend, you'll keep accumulating debt once again and maybe next time you won't be able to resort to your home equity.
Moreover, since refinance home loans generally worsen the terms of your mortgage, you are further risking your property if you fail to meet the monthly payments. And though you may be replacing expensive debt with cheaper and more affordable debt, you are also replacing unsecured debt with debt that is secured with your home. If you are not good at managing your finances (and that's why you had to resort to debt settlement), that's something that you'd better avoid. Read more from: http://www.credit-card-gallery.com/article/149,Credit_Card_Debt_Settlement_Avoid_Refinancing!
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