Profile picture for pearcewg

HARP 2.0 refinance question(s)

I have a home which I currently have listed for sale, and I am investigating if I can refinance the home under HARP 2.0 and convert it to a rental property.

The home was my primary residence, but it will not be if I refinance.  I have excellent credit; the home has never been rented (not yet rented).

I also am now divorced, and the home will be deeded to only me, and I need to get my ex-spouse off of the mortgage.

I owe $289k on the home and it should appraise between $310k and $325k.  Home was purchased in 2005, and the mortgage is a conforming Fannie Mae loan.

I have heard that it is possible to use HARP 2.0 to take an ex-spouse off of the mortgage.  I also heard it is possible to use HARP 2.0 to convert a property to an investment property through an "unintended landlord" clause.

Can anyone verify if this information is true?  Do you think I can refinance with HARP 2.0 in my situation?  Do you know of anyone currently doing this type of refinance?  Does having the home listed for sale have any impact on a refinance?

Source for some of my information:
http://themortgagereports.com/259/harp-making-home-affordable-guidelines
  • December 22 2013 - Sarasota
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Answers (4)

Profile picture for mymortgagebrokerjoe
Pearcewg, you can not refinance your home while it is currently listed for sale, regardless if it is your primary residence or a rental. You will need to provide proof that he home is no longer listed. A canceled listing agreement should suffice.

I also suggest that you have the home deeded to you prior to applying for a loan. Even though you are divorced, your ex will still have ownership of the property, even if your divorce decree says otherwise. This can delay the application/approval process if your ex spouse is unable to sign a quit claim deed prior to or at closing. The lender may request that your ex spouse either sign a quit claim deed or sign the mortgage at closing, acknowledging the new lien against a property that she still holds title to. I have done many loans like yours here in Florida, and have found it much easier to for all parties involved to have the quit claim deed signed prior to application and/or closing. The title company can assist in preparing and recording the quit claim deed, as you want to make sure the deed is done properly.

As for the HARP refinance, you should be able to refinance based on the information you provided, you would just need to income qualify on your own for the new loan, although you can add some one new with most lenders as long as you stay in title on and on the new loan.

As for converting the property to a rental, this is permissible using a HARP refinance loan, provided you meet the program and lenders guidelines for a HARP refinance of an investment property, as this can and will vary from lender to lender. I specialize in HARP refinance loans for both primary residence and investment properties.
  • December 23 2013
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Yes lets chat. I can help you. The harp program should be a good fit for your situation.
  • December 23 2013
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I believe the answer is yes to all your questions provided you take the house off the market.  Feel free to contact me through my profile and I will put you in touch with someone who can help in my group
  • December 22 2013
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I will start with the easy part of your question.  listing your home for sale will not have an impact on you being approved for a new mortgage so long as it is off the market at the time you apply for your mortgage. 

Most people who take advantage of HARP do so when they are underwater or have been in the property long enough for the original mortgage insurance (if there was any) to no longer be paid.  If this is not your current position then you will find I think it may make more sense to travel down the path of a regular mortgage. 

Next have you already used the look up tools from Fannie and Freddie to check if your mortgage is eligible?  Is the mortgage still the original from when you purchased the home?  Was your mortgage a traditional loan or did it have reduced documentation? 

Yes you will be able to do HARP on an investment property however you will look at higher interest rates than if it was your primary home.

As for your ex-spouse, I have not come across this son a HARP before however it usually is not a problem so long as you qualify on your own for the loan. 

Good Luck
  • December 22 2013
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