Featuring Victoria Dobbins, Branch Manager, Wells Fargo Home Mortgage
When it comes to refinancing, Wells Fargo Home Mortgage provides options to meet the needs of many homeowners. One of the most common questions Victoria Dobbins, branch manager of Wells Fargo Home Mortgage in Maitland, hears from clients is, “What is HARP and am I eligible?” Recently, we sat down with her to discuss the home mortgage refinancing program.
What is HARP?
Home Affordable Refinance Program (HARP) is a government-sponsored refinance option that many homeowners use when their mortgage is higher than the present value of their home. It was originally started in 2009 and goes by several names including the “Making Home Affordable Plan”, “the Obama Refi Plan” and “Relief Refinance.”
As of March 17, 2012, the HARP 2.0 Refinance Program is available to U.S. homeowners.
My mortgage is backed by my bank. Am I eligible for HARP?
That depends. For some institutions, the bank does in fact back its loans. For others, they are just mortgage servicers, meaning they collect your payments and then send them to Fannie Mae or Freddie Mac. The best way to tell is to speak with a financing specialist or do some diligent digging on your own.
- For Fannie Mae – call 1.800.7Fannie or go to www.FannieMae.com/LoanLookup
- For Freddie Mac – call 1.800.Freddie or go to www.FreddieMac.com/MyMortgage
If neither Fannie nor Freddie has a record of your mortgage, your loan is not HARP-eligible. That said, you still may be eligible for “regular” refinancing at lower rates with your bank.
I got a HARP rate quote from my bank with a high interest rate. Should I shop around?
Of course you should. You should shop your HARP mortgage rates because they vary widely from bank-to-bank. Just like you would do with any other large purchase, make sure to do your research to get the best deal possible. Of course you want a knowledgeable professional, but be sure to work with someone you trust and like as well. You’ll be hearing a lot from them; well, if they’re good at their job you will anyway.
What are the minimum requirements to be HARP-eligible?
There are a few requirements to be HARP eligible. First, your mortgage must have been paid on-time for the previous six months and at least 11 of the last 12 payments must also be on time. Next, your mortgage must have been sold to Fannie or Freddie prior to May 31, 2009. The other big one is that you have not used the HARP program before, there is only one HARP refinance per mortgage.
The mortgage must be for either your primary residence, second home or investment property. You must also be able to show that you have income to support your new mortgage payments.
It’s a common misconception that you must be “underwater” to use HARP, and that is not the case. However, you cannot use HARP unless you have less than 20 percent equity in your home.
What doesn’t HARP do?
It’s important to note that HARP doesn’t however forgive your mortgage balance or reduce the principal owed. The program also doesn’t require that you pay mortgage insurance, assuming that you don’t pay it now. If you pay it now, you’ll still have to pay it even with the HARP refinance.
HARP refinances are also limited to the areas loan limits so they won’t cover huge property mortgages. For instance, in most cities (including Orange County) the conforming loan limit is $417,000.
To learn more, contact Victoria Dobbins today.
2400 Maitland PKWY Suite 117
Maitland, FL 32751
407- 659-6844 Tel
NMLSR ID 455461