A client called to say that he received an offer that sounded so good that he couldn’t believe it. He wanted my opinion as to whether he should pursue the deal which basically dealt with refinancing his home using a home equity loan. The client owes approximately $50,000 and has about 10 years left on a 6.25 percent mortgage. Currently the house is worth approximately $200,000 to $250,000. The client was approached by his bank to refinance the home using a home equity loan and was quoted a rate of 2.5 percent on the home equity loan. The client told me it seemed like a no-brainer that he should refinance because he would be substantially cutting his payments down. The question he had for me was, what was he missing?
Regions Bank Sets Goal to Close More Than $1 Billion in HARP Refinances in 2012
March 28, 2012 By
BIRMINGHAM, Ala., Mar 28, 2012 (BUSINESS WIRE) — Regions Bank RF -1.29% has set a goal in 2012 of providing more than $1 billion of relief to homeowners through the Federal Housing and Finance Administration’s Home Affordable Refinance Program (HARP). Under the revised program, homeowners with loans owned by Fannie Mae or Freddie Mac — including those whose property values have declined and have been unable to refinance — may qualify based on when they purchased their home and other criteria. HARP features:
– Loans designed to help homeowners who may not be candidates for conventional refinances or who owe more than their home is worth take advantage of historically low interest rates and other refinancing benefits.
– Opportunities to refinance with a current loan servicer and now, other participating lenders, such as Regions.
– Elimination of certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for others.
– Simplification of various paperwork involved in processing the loan.
Car Refinancing Risks and Benefits
March 27, 2012 By
You’re looking for some extra cash, and you see the ad on TV: Refinance your car and save money, or just lower your monthly payment by extending the length of your loan. Question is, is it really a good idea? Before you refinance, it’s important to understand that a positive tool like refinancing can be used in shortsighted and reckless ways. Refinancing involves transferring your car’s title — official ownership — from one creditor to another. The assumption when you sign up for a car loan is “that’s it,” said John Ulzheimer, president of consumer education at Credit.com, but as long as you’re still paying for your car loan, you can refinance it.
HARP 2.0 Mortgage Refinancing
March 27, 2012 By
Today I’ll answer several questions from readers about my Sunday column on the ever-popular Harp 2 refinance program. This program, which is just getting into full swing, lets homeowners who have a mortgage that was purchased by Fannie or Freddie before June 2009 refinance into a new Fannie or Freddie loan if their loan-to-value ratio is at least 80 percent (there is no upper limit) and they are current on their payments.
Could New FHA Rules Help You Refinance?
March 26, 2012 By
President Obama announced this month a new initiative that will reduce mortgage insurance costs for borrowers who refinance their Federal Housing Administration (FHA) loans. The administration estimates that the program could help an additional 2 to 3 million homeowners refinance and lower their mortgage payments. Under the plan, which starts June 11, homeowners who have an FHA-insured mortgage may be eligible for a streamline refinance at a lower insurance premium. The upfront insurance premium, required of all FHA borrowers regardless of the amount of equity in their home or the down payment amount, will be reduced from 1 percent of the loan amount to 0.01 percent.
HARP to Become Household Name in Refinancing
March 22, 2012 By
With so many homes across the nation continuing to lose value, the government remains steadfast in its goal to make it easier for homeowners to refinance. The HARP (Home Affordable Refinance Program) program, revised in October 2011 by the Obama administration, removed many of the harsh stipulations that caused the original HARP program to be vastly ineffective. With the influx of qualified homeowners under the new HARP program (HARP 2.0), the self-titled Mr. HARP is here to help underwater homeowners (starting in California) finance their homes at a lower rate.
Cut Mortgage Payments in Half!
March 22, 2012 By
New options have enabled some homeowners to Cut Mortgage Payments In Half!
Owe less than $729,000 on your mortgage?
*You probably qualify for the President’s Home Affordability Program.
*Under the plan the government may significantly reduce your mortgage payments.
*If you haven’t looked into refinancing recently, you may be surprised what you can save!
HARP Program Popularity Grows
March 21, 2012 By
Interest rates rose to the highest levels since December during the week ended March 16 and, driven largely by refinancing, mortgage applications activity fell significantly. The Mortgage Bankers Association (MBA) reported that its Market Composite Index, a measure of mortgage application volume, decreased 7.4 percent from the previous week on a seasonally adjusted basis and 7.1 percent unadjusted. The Refinance Index decreased 9.3 percent from the previous week and the refinancing share of mortgage activity decreased to 73.4 percent of total applications from a 75.1 percent share during the week ended March 9. This is the lowest share of applications for refinancing since July 2011, however as noted below, the new version of the Home Affordable Refinancing Program (HARP) had a significant impact on refinancing in a number of states. The seasonally adjusted Purchase Index decreased 1.0 percent from one week earlier and the unadjusted Purchase Index was down 0.6 percent from the previous week and was 1.9 percent lower than the same week one year ago.
Mortgage Refinance Plan in Place but Lenders Wary
March 20, 2012 By
The Obama administration’s landmark refinance plan for severely underwater homeowners became fully operational Monday after automated federal loan processing systems were updated during the weekend.
But nearly five months after the program’s debut, and following what many hoped was the last hurdle to a wholesale start, mortgage brokers said wary lenders are still hesitant to refinance loans other than their own. The new Home Affordable Refinance Program is for homeowners current on their mortgage payments and regardless of how much more they owe on their loan than their home’s value, or being “underwater.”
Home Affordable Refinance Program
March 20, 2012 By
On Monday, the federal government announced that it would revise the Home Affordable Refinance Program (HARP), implementing changes that The Washington Post’s Zachary A. Goldfarb reported would “allow many more struggling borrowers to refinance their mortgages at today’s ultra-low rates, reducing monthly payments for some homeowners and potentially providing a modest boost to the economy.”
The HARP program, which was rolled out in 2009, is designed to help. Those who are “underwater” on their homes and owe more than the homes are worth. So far, The Post reported, it has reached less than one-tenth of the 5 million borrowers it was designed to help. Here’s a quick breakdown of what you need to know about the changes.
