California HARP Lender: 855-674-8525
The new HARP 2.0 program allows underwater or near upside down Oakland homeowners the ability to refinance into a lower mortgage payment or a more stable loan program.
Understanding the true benefits of a lower payment, and how to shop for the best California HARP lender to help you with a refinance is an important step that can put you in the driver’s seat.
Your mortgage payment is generally due at the beginning of the month, and most lenders start assessing late fees on the 15th. It is extremely important to remain under 30 days late on a mortgage payment, especially within the first 8-12 months of closing on a new loan to maintain your credit scores.
When you receive your first mortgage bill, there will be a few numbers that add up to your total payment:
This is the portion that goes towards paying down your balance. An Amortization Schedule will break down the exact amount of each payment that is being applied to the principal and interest.
The interest payment is the amount you’re paying the bank over time to borrow the principal balance. The record low HARP Interest Rates we have seen over the past few years have made HARP such a popular program. Depending on which loan program, interest rate and closing cost scenario you chose, the amount of interest due every month may vary.
Real Estate Taxes can either be included (Impounded) in your monthly payment (PITI), or paid by the homeowner separately. Certain government loan programs or high Loan-to-Value (LTV) mortgages require that taxes and insurance be included with the total mortgage payment.
According to the harp-application-process HARP Guidelines set by the “making-home-Making Home Affordable Program, an impound account is required, even if you are currently paying your taxes and hazard insurance separately.
This is your hazard insurance (Fire), which protects your home and belongings. While there are many ways to save money on your property insurance, it’s important to know and trust your insurance agent so that you can be fully aware of what’s covered in your policy. Some homeowners shopping strictly on price may unknowingly leave valuable personal items without protection just to save an extra $15-$19 a month.
5) Mortgage Insurance
Mortgage insurance is in addition to hazard insurance, and completely unrelated. A lender will require a borrower to pay mortgage insurance on a property with a Loan-to-Value greater than 80%. The main purpose of mortgage insurance is to protect from foreclosure losses if the borrower fails to meet the monthly payment obligations.
Prior to the HARP 2.0 updates, transfering mortgage insurance between lenders when you owe more than 80% LTV on a property was a major challenge. The good news is that mortgage insurance companies are cooperating with any PMI and Lender Paid Mortgage Insurance (LPMI) issues.
Call us today at 855-674-8525 for questions with calculating your Oakland HARP mortgage payments.
Prior to following through with a HARP Application, there are a few questions you should ask yourself to determine whether or not a HARP Refi is the best option for your personal scenario.
The new HARP 2.0 program allows for 15, 20 and 30 year mortgage payment terms. There is also an option for an Adjustable Rate Mortgage (ARM) with extra qualifying criteria. However, we recommend choosing a more stable long term loan product since interest rates are so low.
A good rule of thumb is when it makes sense for you based on payment or interest savings or changing to a more favorable loan. Ask your mortgage professional for an analysis to see what works best for you.
Another point to consider when moving from a 30 year loan to a shorter term, such as a 20 or 15 year mortgage, is that your monthly payment may remain the same or slightly increase.
The difference in savings in a case like this would be calculated over the entire course of the loan in the amount of interest.
HARP lender guidelines prevent mortgage companies from charging higher rates or fees by placing a cap on the amount a borrower’s rate can increase.
In the past, Loan Level Price Adjustments (LLPA) to a rate due to high LTV or lower credit scores have prevented borrowers from obtaining low enough rates to make the program worthwhile.
It depends on the cost of the lower rate, which is paid for through what’s called a discount point.
One major benefit with HARP is that in most instances, all closing costs can be rolled into the balance of the new loan.
NOTE: Freddie allows 4% or $5000. This may not cover all costs and may require you to bring money to the table. Either way, your loan originator should be able to show you the actual numbers and options so that your decision to pay extra for a lower rate can be made by looking at how the numbers add up over time.
As stated above, the HARP Program is meant for Oakland homeowners who plan on staying in their underwater property for several years.
If you feel that you may be looking to Short Sale within the next five years, we highly recommend speaking with a financial advisor, attorney and your C.P.A about the potential tax implications or legal consequences you may face if you sell after the Mortgage Debt Relief Act ends.
Using the Oakland HARP mortgage calculator on this page can help get you back on track financially and into a safe and secure fixed rate loan with a low interest rate.
HARP is short for Home Affordable Refinance Program and it sure does deliver on affordability. The Oakland HARP mortgage calculator shows that by refinancing your existing loan through the HARP program you can still qualify for a loan with 80% LTV or higher.
In addition to being able to help California borrowers that are underwater, a HARP mortgage calculator can also help homeowners understand how to get out from under their loans and negative equity. The great news is that with the present interest rates, some borrowers will be able to refinance their existing 30 year mortgage into a new 20 year fixed rate loan and still save money on their monthly payment.
In addition to saving money on your monthly payment, imagine being able to knock off almost 10 years of mortgage payments! The Oakland, California HARP mortgage calculator shows that loans need to be originated before May 31, 2009 which means that at the least borrowers would be saving 7 years of mortgage payments. Considering a national average mortgage payment of $1,000 that would amount to over $80,000 in savings just from reducing the term by 7 years!
The California HARP program is a wonderful gift to those affected by the real estate and mortgage slump over the past several years. The Obama administration guessed that millions of homeowners were underwater with their mortgages in light of the depreciating property values. Until the creation of the HARP program, traditional loan programs weren’t able to help these California borrowers refinance despite the constant dropping of the interest rates over the past several years. Now is the time, however, with the 2012 HARP loan program.
Take a hold of your finances and get into a new loan that takes better care of you and your family. Don’t hold on to your adjustable, balloon, or even fixed rate mortgage that has a higher interest rate. Instead, call a mortgage professional today and start your Home Affordable Refinance Program application. It’s a painless process with only a few requirements and qualifications.
CLICK HERE to submit a contact request online and we will have one licensed California HARP Approval Network member connect with you asap. You can also feel free to Call us directly @ 855-674-8525 for any questions about HARP loans.