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REFI Q FOR OLD 80/20 LOAN USING HARP

I have two mortgages on a philly condo we bought in 2007 - aggregate loan balance today is ~265K & we are paying ~6.5% but no PMI, I would say property could appraise at 270K - almost 10% drop from where we bought.  I'm considering using HARP to refi the first mortgage, or attempt a standard refi at 95% LTV assuming I pay down the loan to 256K.  If i went with the second option i would have to worry about PMI and there is a benefit to having the mortgages disaggregated as the second loan wlil go away if i keep overpaying.  does anyone have any good ideas as to how to go about reducing my payments.  i'm thinking using HARP is best option, but i'm not sure -
  • January 18 2012 - Center City West
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Answers (7)

For the LTV you mention, you don't need to wait for March, you should fit just fine in current version, and most lenders have already implemented the lesser pricing adjustments that 2.0 offers in comparison to 1.0.
  • January 19 2012
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Thanks Mark - sounds like I need to wait for HARP 2.0 in March - then shop around when it is time to pull the trigger -
THANKS YOU EVERYONE!
  • January 19 2012
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The lender should be paying their originators the same regardless of the loan program.  The amount of compensation would be paid based on the loan amount.   Let me know if that answered your question.  Try posting a loan request on zillow to get the best deal possible.  Some of the bigger banks are having longer turn times now. 
  • January 19 2012
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Thank you everyone for your answers - is there any bias for originating a HARP vs. standard refi in terms of compensation - wells has my mortgage - is there any reason why not to utilize them for HARP refi?
  • January 19 2012
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HARP will be your best option with subordiantion on the second mortgage.  The hits to the rate will not be as much with the high LTV.   
  • January 19 2012
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HARP the primary loan, subordinate the second, and then use your monthly savings to attempt to pay down the higher rate second as aggressively as follow so you can retire it at some point.

Properly structured subordination requests on new HARP loans have a very high success rate.
  • January 19 2012
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Harp 2.0 will be release by fannie mae and freddie mac to all lenders in March.  This is when they will adjust their underwriting software (DU& LP) to allow fdor unlimited LTV or negative equity.  But the forseeable issue people may run into in your scenario is the 2nd mortgage lender will have to subordinate (stay in 2nd lien position) to the new 1st mortgage.  The 2nd lender really is in a better situation b/c now you will have a lower rate, but their underwriting models do not allow for unlimited LTV or negative equity.  We will see how this plays out for the rest of the year.  So Harp working for you will depend on the 2nd lien holder.  And you cannot combine the two with Harp.  Did you check to see if your condo is eligible?

Secondly, if you pay down the mortgage, there are option to pay an up-front MI so you will not have to pay monthly.  this could be a viable option for you.
  • January 19 2012
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