Best HARP 2.0 Rates
One of the top questions from homeowner’s these days seems to be, “What lender can get me the best HARP 2.0 rates on my refinance?”, but this question should actually be second to the most important factor: “What lender can even do my HARP refinance?”. Unlike most standardized mortgage programs we’ve all come to know, there are many factors that will determine which lenders can complete your transaction. There are also different “pricing hits” for various aspects of your scenario which are important to know before you start your search for the best HARP 2.0 rates. In this piece we’ll be focusing on how to best educate yourself on the potential pricing hits:
Best HARP 2.0 Rates – Loan Level Hits to Watch for:
Though we’d all like to get our hands on the best HARP 2.0 rates, its important to know what the various “big banks” who will ultimately service these loans view as additional risk factors. The most common loan-level price adjuster is LTV(Loan-to-Value). There are also loan level hits for credit score, property type, and occupancy type (owner-occupied, investment property, etc.). Lets first focus on the most common: LTV pricing hit:
Best HARP 2.0 Rates – Price add-on’s for LTV:
Now while this new version of HARP is not supposed to limit the LTV, there are only a select few banks willing to accept any loans over 125% LTV. In regard to pricing hits specifically, the best HARP 2.0 rates can be obtained with the lowest LTV. For example if your home is at 80%-85% LTV, there shouldn’t be much of a pricing hit at all. However, once you exceed the higher LTV thresholds such as 90%, 95%, 105%, and especially the 125% LTV, now you should expect to pay about .25% higher in rate, depending on the lender. A good rule of thumb when looking for the best Harp 2.0 rates is to first ask the lender if they have the ability to complete your transaction based on your expected LTV, and second, what the pricing hit will be for your expected LTV.
During your search for the best HARP 2.0 rates, the first question should be, “can this lend actually do this deal given my property’s current LTV?”
Best HARP 2.0 Rats – Pricing Hits Fee Structure for Credit Score and Property Type:
Other aspects to consider when searching for the best HARP rates is credit score and property type. As you would probably expect, with less than perfect credit comes a bit higher rate. There are usually very little hits if you’re at 680+ but typically there will be a small hit once you get below 660. Additionally, there is a hit for property type. Specifically, condominiums usually come with about .125% hit to rate (75bps to price) if the LTV is over 75%. This is an industry-wide Fannie Mae hit so plan on getting this bit higher rate if you own a condo and are over 75% LTV.
As you can see, there isn’t a one-size-fits-all rate/price for this program and its important to take all aspects into consideration when in search of the best HARP 2.0 rates.
Author Joe Karns is sales and marketing leader and master of getting you the best HARP rates, is dedicated to bringing his subscribers relevant and useful information. Want a free mortgage checkup? Check out Joe Karns at the following link for more a FREE refinance consultation and expert advice on finding the Best Refinance Lenders. Or, click here for a free quote on Best HARP 2.0 Rates.Author's Google+ Page