HARP Mortgage Closing Costs Reduced

by Dawn from Kalamazoo, Michigan USA

Ask Kate about HARP Mortgage Closing Costs Reduced - Updated December 2011: Kate, The only refinance we can do is through the Home Affordable Refinance Program (HARP). What's keeping us from proceeding is the estimated $3K we're being told we have to bring to the closing table.

Dawn continues... We wonder if it's wise to wait until the "new rules" for HARP are issued and some of these fees might be lowered or eliminated. Yes, we know mortgage rates are rising again, but we still don't want to pay out closing costs we don't have right now.

December 2011 HARP Closing Cost Update

Is it a good idea to sit it out for another two months, or should we find a way to get the money and refinance now under HARP? Thanks!

Kate Answers: HARP Mortgage Closing Costs Reduced

Hi Dawn!

I wish I had a crystal ball to send your way.

So instead, let's look at a quote from the Obama Administration released in conjunction with Fannie Mae and Freddie Mac.

Reductions in HARP Mortgage Closing Costs

"...eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers."

and

"...eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises."

Setting aside gobbledy-gook lingo, they are saying there will be LESS cost to homeowners refinancing with HARP due to three improvements...

1. Waived fees when homeowners decrease their mortgage term
2. Fewer required appraisals
3. Fannie Mae and Freddie Mac are lowering certain fees

How much will these reductions add up to? We don't have specifics yet.

December 2011 HARP Closing Cost Update

11 Million Homeowners Deserve Good News

Now don't get me wrong. I am super excited over the HARP announcement. Eleven million homeowners with upside down mortgages need the help.

But at this point, we only know the general information contained in the press release that I wrote about at Sweeping Changes to Home Affordable Refinance Program. That's it, so far.

December HARP Closing Cost Update

Moving Forward With HARP vs Postponing Action

My suggestion at this juncture is the 2 column list. In the left column, list the benefits to moving forward with a Home Affordable Refinance Program under the existing guidelines. As you mentioned, locking in a low mortgage rate might be at the top of your list.

In the column to the right, enter the drawbacks to moving forward, for instance if you have to borrow $3000 to pay HARP mortgage closing costs.

I understand this may seem simplistic, but the exercise of writing out pros and cons helps brainstorm new ideas.

Important Home Affordable Refinance Program Notes

December HARP Closing Cost Update

It is important to remain current on your mortgage payments, with no late payment in the past six months, and no more than one late payment in the past 12 months.

Should anyone question whether they have a Fannie or Freddie mortgage, they can call 800-7FANNIE and 800-FREDDIE during the hours of 8 am to 8 pm ET. Have your account number and subject property address available.

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