Is HARP 2 or HAMP Best
by Laraine in Chowchilla, Marjorie in Orlando, Eduardo in Miami, and John in Tucson
Ask Kate if HARP 2 or HAMP is best: Although Home Affordable Refinance Program (HARP 2.0) and Home Affordable Modification Program (HAMP) sound similar, they actually meet two different needs. Discussed previously on Get-Your-Best-Mortgage-Rate.com, readers are asking for additional key elements to better understand their options...
HAMP Modifications vs. HARP 2.0 Refinances By Laraine H. in Chowchilla, California:
Kate, I potentially qualify for both the HAMP and the HARP 2.0 plans. Which is the best option to pursue?
What type of interest rates are given on a HARP 2.0 mortgage loan from a participating bank? In my search, the banks seem to be very comparable.
Ask Kate answer: HAMP Modifications vs. HARP 2.0 Refinances
HAMP is primarily designed for homeowners who are struggling to avoid foreclosure due to a hardship.
HARP has no hardship requirement. In fact, HARP is not intended for those in imminent danger of losing their homes by bank foreclosure.
But the two Making Home Affordable plans cross over in purpose occasionally.
You most likely will choose a fixed rate mortgage for HARP. Banks set their own HARP interest rates and closing costs. If you are finding banks to be competitive, please report back here which ones seem to be priced the best. I'm sure other readers would appreciate knowing!
The HAMP mortgage rate is fixed during the first couple of years. Afterward, it gradually adjusts on an annual basis until reaching the maximum rate.
HAMP offers principal deferments under the program offshoot, Principal Reduction Alternative (PRA). PRA reduces monthly house payments because mortgage payments are based on the reduced loan amount. The deferred portion is not due until the home is sold or refinanced.
If you have a 2nd mortgage, it may also be eligible for a loan modification under the Second Lien Modification Program (2MP).
As the homeowner, you do not pay closing costs, however banks report to credit bureaus that you have modified your mortgage under a federal government plan which could lower your credit scores.
For more details on Home Affordable Modification Program, go to HAMP Phase 2 Loan Modification News
How Can I Compare HAMP 2 Closing Costs and Mortgage Rates By Marjorie in Orlando, Florida:
Kate, How can I compare closing costs and mortgage rates on Hamp 2 refinancing across approved providers? I am in Orlando, FL and am under water in a condo loan of $128,000, valued currently at 80,000.
I was quoted $5000 in closing costs and 4.875% interest from my mortgage holder. I want to shop these rates but am only interested in comparing apples to apples.
Ask Kate answer: How Can I Compare HAMP 2 Closing Costs and Mortgage Rates
Short answer (especially for me)... You can't compare HAMP closing costs, fees, or mortgage rates among lenders!
This is because a homeowner can only go through their loan servicer for a HAMP loan modification. But good news! There are no closing costs with HAMP!
Perhaps though, you are thinking of the new HARP 2.0 plan
recently announced. Remember, mortgage companies and banks set their own interest rates and closing costs for HARP.
To date, there is no published list of Fannie Mae lenders participating in the HARP plan. However Freddie Mac publishes a partial list
For more details on comparing mortgage rates and closing costs, go to Ask Kate how to Understand Mortgage Closing Costs
and Reduce Mortgage Refinancing Costs
HARP Mortgage Refinancing After Loan Modification By Eduardo B. in Miami, Florida:
Kate, Is it possible to HARP refinance my mortgage after a HAMP loan modification made 24 months before?
Ask Kate answer: HARP Mortgage Refinancing After Loan Modification
Yes, per the guidelines it is. But your mortgage payments can have no more than one 30 day late in the prior year and none in the immediate 6 months before applying for HARP 2.
You will also need to document the qualifying HAMP hardship has ended and is no longer affecting your ability to afford your mortgage payments.
Go to Can I HARP refinance after a short sale on another property
for more details on HARP 2 initial eligibility requirements, payment history guidelines, and borrower benefit requirements.
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