HARP Refinance Rates

by Lynette L. from Middletown, Connecticut USA

Ask Kate who determines HARP refinance rates: Hi Kate, We are considering a HARP refinance with our current lender. We were told that the finance rate was set by Fannie Mae and the current rate is 4.375 percent.
Lynette continues... Is that true? I believe I just read in one of your articles that the interest rate is not set by Fannie Mae, so now I am confused.

Kate Answers: Who Sets HARP Refinance Rates

***zz-portrait-left.shtml*** Dear Lynette,

Thank you for writing! I am so happy to know if, when and where there's confusion. In fact, I depend on letters like yours to know what to address.

And yes, you are right. There is a lot of confusion over the Making Home Affordable - Help For America's Homeowners program.

To clear up confusion, I am directly quoting the Making Home Affordable Government Website, specifically FAQ 12.

Determining HARP Refinance Rates

Question: What are the interest rate and other terms of a refinance under HARP?

Answer: The rate will be based on market rates in effect at the time of the refinance and the homeowner will be subject to any associated points and fees quoted by your lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans must have no prepayment penalties or balloon payments.

You can also read other homeowner's questions with my answers about Loan Modification, Home Affordable HARP and HAMP, Strategic Default, Real Estate Short Sale, and FHA Short Refinance here.

Lynette, one more thing. I'd like to hear back from you. I understand there are offshoots of the HARP program that could have different guidelines. So please let me know if this page was helpful to you or if you have more questions.

Comment here on HARP Refinance Rates. Or Ask Kate another question here.

Best wishes,


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Is My HARP Interest Rate Correct?
by: Anonymous

We submitted a loan application at Bank of America for HARP. We are underwater but current with payments, customers since 1975, same address too.

We are refinancing through HARP 1 program. B of A offered us 4.625%. Is this the correct HARP Interest Rate? Our application was submitted on May 23, 2012 and B of A has locked the rate.

Hi Kate Ford here, HARP refinance rates are set by individual lenders, as they are in traditional mortgage refinancing. This means HARP interest rates vary among lenders. So there is not a "correct" rate.

If you want to make sure you got a good deal, you will need to compare your HARP rate to other lenders' rates on the exact day B of A locked in. Remember to compare closing costs too as rates and fees are two sides to the same coin.

Learn how to accurately compare mortgage rates and closing costs here. You will also find links to 2 more pages that will help you understand the process further.

Good luck and best wishes, Kate

HARP Refinance
by: Barbara S.

We just did a HARP 1.0 refinance with a 15 year fixed rate of 3.75% with our current mortgage lender. We have a credit score of around 799 and never been late. It was a bit of a hassle as the lender required a TON of paperwork and I had to submit some paperwork twice or 3 times and then they wanted it signed and dated etc.

We applied in December and just got approved today, around two months later. Our current rate was at 6.75% for 30 years so it was a great deal but be prepared to do A LOT of paperwork.

From Kate: Hi Barbara, I am thrilled to hear your success story. Sounds like it took a lot of elbow grease and persistence. Awesome rate, especially compared to your 30 year fixed. Just think - In another 15 years, you will be mortgage free! Congratulations! -Kate

Why Do Mortgage Rates for HARP Differ Among Lenders
by: Chris

I am surprised at the varying rates offered under HARP. I was offered a rate of 4.625% for 21 years and have talked to neighbors who have been offered under under 4.0% for 30 years. Why is this?

Hi Chris, good question and one I'm often asked. In spite of being part of Making Home Affordable, the mortgage rates for HARP are market driven and set by participating lenders.

Although it feels like the government would be controlling them, getting the best mortgage rates for the Home Affordable Refinance Program is similar to a more traditional refinance.

Thanks for asking, Kate

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You can also ask Kate about your mortgage at Refinancing Advice The Nuts and Bolts.

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