HARP loans plug a gap that opened during the housing crash of 2008. During the crisis, many homeowners, notably those who had just bought homes, found that falling housing prices had left them owing more on their mortgages than their homes were worth. Since conventional mortgage lenders usually require borrowers to have a loan-to-value ratio of less than 80 percent, homeowners who found themselves suddenly underwater with their mortgages were effectively unable to renegotiate their loans. HARP loans lift the loan-to-value cap by guaranteeing mortgages for eligible homeowners who owe more than their homes are worth.
Being able to refinance a mortgage has many advantages: Negotiating a lower interest rate can reduce the lifetime cost of a loan by thousands of dollars. Likewise, switching from interest-only payments to equity-first payments help dig borrowers out of debt and reduce their loan-to-value ratio more quickly than would have been possible under the old loan.
Renegotiating the terms of a troubled mortgage has value in itself. Many homeowners who opt for a HARP loan do so mainly to stabilize their monthly payments by trading an adjustable-rate mortgage for a fixed rate, which helps buffer the homeowner against wild swings in interest rates and housing prices over the life of the loan. Three loan companies within the market are Nymeo, American First Credit Union and 1st Mariner Bank.
HARP Loans: What to Look For
The federal government imposes certain conditions on those seeking to refinance with a HARP loan. Individual lenders may also require borrowers to meet their own standards before lending. The structure of the HARP home loan program allows a great deal of flexibility on the part of the lender, which makes it important for borrowers to know what to look for before closing. Also, the program is set to expire on December 31, 2015, which adds a certain urgency to the application process.
Fannie Mae- or Freddie Mac-Approved Lender
Federal requirements state that in order to be eligible for a HARP refinance, a mortgage must have been acquired or guaranteed by either Fannie Mae or Freddie Mac prior to May 31, 2009. Often, homeowners are unaware whether their loans are owned or underwritten by either agency, so it is important to check first.
Extra Requirements for Closing
Other requirements hold that your house must not be in foreclosure, you must be current on all payments and that you haven't made any late payments for at least 12 months. Individual lenders may impose additional requirements. Though the government does not require an appraisal or home inspection for a HARP loan, for example, some lenders might. To qualify for the federal program, borrowers must owe more than 80 percent of their home's value, though individual lenders may set their own caps.
Terms and Closing Costs
Closing costs for a HARP home loan are usually lower than they are for conventional refinancing. One consideration is whether the lender requires that the borrower buy or continue to pay for private mortgage insurance (PMI). This insurance protects lenders in the event of default, and most borrowers with low loan-to-value ratios are required by their lenders to carry PMI.
Taking out a HARP loan can save thousands of dollars on a mortgage that might otherwise not be worth saving. The program can reduce interest rates and monthly payments as well as restructure adjustable-rate loans to be more stable over the long term. Individual lenders may impose their own requirements, however, so exact terms vary considerably.
People who owe more than their homes are worth can apply for a HARP loan through 1st Mariner Mortgage, a division of 1st Mariner Bank. The bank, which is based in Baltimore, Maryland, has a lot of experience with both conventional and conforming – or federally guaranteed – residential mortgages.
1st Mariner Bank is authorized to conduct federally guaranteed refinancing under HARP loan guidelines. For existing FHA-insured homes, 1st Mariner offers a streamlined financing option, which dispenses with the appraisal and credit check. In compliance with FHA requirements, refinancing is only offered to borrowers whose mortgage payments have been no more than 30 days late during the previous 12 months and who are expected to benefit from the refinancing by either reducing their monthly payments or interest rate or switching to a fixed rate.
Streamlined HARP loans are not allowed to exceed the principal owed on the property, which prevents borrowers from receiving cash at closing or borrowing to cover closing costs. It is possible, however, to skip a payment for the month in which the loan is finalized, which can result in a substantial short-term windfall and defray closing costs. When an appraisal is included in the process, 1st Mariner Bank may lend money to cover closing costs, provided the total loan amount does not exceed certain limits.
One feature of HARP home loan refinancing is that the very high loan-to-value ratio on the existing mortgage imposes a condition on almost all refinancing contracts – the borrower must carry private mortgage insurance (PMI). This can be the single greatest expense incurred during the process, regardless of which lender you're working with, as you will be expected to pay 1.75 percent of the total loan up front to comply with FHA requirements. An annual premium of 0.55 percent is prorated and applied to each month's payment. Fortunately, this insurance is automatically canceled after 60 payments or when the loan-to-value ratio drops below 78 percent.
Refinancing through 1st Mariner Bank's FHA-approved HARP loan program requires that borrowers meet federal eligibility requirements and carry PMI. The bank offers a streamlined service for borrowers who wish to avoid the appraisal step, though this imposes conditions on the total amount available to borrow. The bank's experience with writing federally insured loans speeds the process along, and the option to skip a payment for one month during closing can be appealing for homeowners whose chief concern is staying current on their monthly payments.
Refinancing your home through American First Credit Union can be done quite quickly, and even special considerations, such as the presence and disposition of a second mortgage, can be handled in an expedited manner for an additional cost. The credit union is an HUD-authorized HARP loan vendor and can process applications for qualifying applicants living, working or attending school in or around Orange County, California.
American First Credit Union is a Southern California-based credit union that can offer Home Affordable Refinance Program (HARP) loans to qualified borrowers nationwide. The credit union has met the requirements necessary to partner with Fannie Mae and Freddie Mac, and it provides a full range of financial services in addition to HARP loans, such as home equity lines of credit and loan modifications. The lender can offer its services to the residents of Orange County and 16 surrounding communities.
In order to qualify for a HARP home loan with American First Credit Union, it is necessary to meet all of the federal requirements for refinancing, with some additional conditions imposed by the lender. To refinance with American First, you are expected to submit the results of an automated valuation model appraisal and pay a nonrefundable fee. American First allows subordination, which is especially helpful if you carry two mortgages and want to focus on your first loan.
Refinancing with American First requires you to cover substantial fees at closing. Subordination of your second loan or home equity credit, for example, requires a $350 application fee, with an additional $25 charged for expedited service. Loans issued through American First are subject to a prepayment penalty, which can substantially increase the long-term cost of the HARP loan despite the near-term savings of switching to a fixed rate mortgage or lowering the monthly payment amount.
American First Credit Union serves members throughout the Orange County, California, with standard, conforming and nonconforming home loans and various modification services, such as subordination of your home-equity line of credit. The lender can process HARP loans that comply with the program's requirements, although additional conditions relating to appraisal and the disposition of your second mortgage are imposed before the final decision is made. Costs range from fairly minor expediting fees to substantial application fees, which must be paid in advance. Additional costs may be incurred in the event you repay the loan early.
Caliber Home Loans Review
Getting a HARP home loan through Caliber Home Loans is quite simple: The bank uses a single online portal, which is accessible to borrowers, to originate and track loans. Some documentation can even be provided online, which speeds up the process considerably. Caliber may, in some cases, be able to protect you from interest rate changes by guaranteeing your rate for up to 60 days. Costs are an issue, but Caliber is sometimes able to fold closing costs into the new loan, provided the total amount of the loan does not exceed certain limits.
Caliber Home Loans is a nationally accredited full-service home loan vendor handling HARP loans and other modifications for homeowners who need their at-risk mortgages adjusted to take advantage of lower fixed rates or shorten their loan terms. Caliber uses a proprietary end-to-end loan origination system, called H2Online, which lets you manage each step of the loan process though an online portal. The bank is headquartered in Texas but offers its products nationwide.
The decision to refinance can be motivated by a desire to take advantage of a lower interest rate. Since the process takes some time, Caliber Home Loans offers to protect you from a "floating" interest rate, which is an unexpected increase in interest rates that takes place during the refinancing period, resulting in a higher fixed rate than you expected. Caliber issues a written guarantee, valid for 60 days, that the interest rate will not increase.
HARP loans generate closing costs similar to other refinancing deal does. These costs usually run between three and six percent of the amount being borrowed, so a $200,000 HARP loan may come with a payment ranging from $6,000 to $12,000 due at signing. In addition to this fee, you may be charged for any prepayment penalty due on your previous home loan, where state law permits. If this is too much to handle at once, Caliber Home Loans can sometimes fold those costs into the loan, albeit at additional long-term cost in interest.
Caliber Home Loans has a simple, user-friendly online interface that eases you through the process of applying for a HARP loan, providing documentation to prove your income and assets and tracking the loan's progress during the approval period. It is sometimes possible to lock in a desired interest rate at the beginning of the process, which protects you from fluctuations that take place between your application and closing.
CapWest Mortgage Review
Originating and servicing loans nationwide, CapWest Mortgage has developed a streamlined process for handling virtually every type of home loan available. You can apply for a HARP loan online, by phone or in person, and it is usually possible to provide the necessary documentation without physically visiting a branch. Fees associated with refinancing vary, but steep discounts are available to Costco and Goldstar members.
CapWest Mortgage is the home loan division of Farmers Bank and Trust, which is located in Kansas and originates loans in all 50 states. The bank offers FHA and VA home loans as well as HARP loans for refinancing. The bank places an emphasis on personal contact, so a live loan agent is quickly assigned to your application and often gets in touch by phone within 24 hours of the online application being submitted.
The required documentation can be delivered by email or by fax, and certain documents can be validated by using a mobile notary. For most loans, it is not necessary to visit a CapWest branch or to personally deliver documents for verification. For the benefit of first-time borrowers, or customers who need a brief refresher on the process, CapWest offers an interactive video tutorial to explain the process and the information you will be expected to provide.
CapWest Mortgage charges various costs to customers seeking a HARP loan, but the costs vary considerably depending on several factors. Since the lender operates in all 50 states, closing costs can vary with geographic location. The bank has partnered with Costco to provide preferred rates and fee schedules to members, which can reduce the total amount owed at closing by over 40 percent.
With a nationwide lending profile and years of experience, CapWest Mortgage makes efforts to establish personal contact with you right away, and it provides educational materials to make sure you know what to expect at each stage of the process. Document verification, including notarized services, can almost always be done remotely. Closing costs associated with the bank's HARP loans are variable, but discount programs are available and can drastically reduce the amount due at signing.
James B. Nutter & Company Review
James B. Nutter & Company is one of the largest privately owned mortgage banks in the United States. The bank does much of the legwork necessary to establish your eligibility for a HARP loan, saving you time during the application process, and sometimes waives closing costs without raising rates elsewhere in the loan package.
Founded in 1951, James B. Nutter & Company remains a privately owned mortgage bank located in the Midwest. The bank is currently owned and managed by the son of the original founder, and efforts are made to retain a "family lender" feel for borrowers. The bank is able to offer conventional loans and FHA-backed loans – including HARP loans nationwide and specializes in offering low-cost mortgages and refinancing packages.
When you refinance through James B. Nutter & Company, the first step the bank takes is to determine your eligibility for the various government programs that are available to borrowers with your circumstances. Loan officers check your application against Fannie Mae and Freddie Mac guidelines to determine your eligibility for a HARP loan, which is usually the borrower's responsibility prior to starting the process, and offer a "good faith" estimate of anticipated costs, rates and anticipated loan terms. Though this is not a binding promise, the written estimate can be a useful guide to refer to during the research and application phase of home refinancing.
Whenever possible, James B. Nutter & Company waives closing costs for home refinancing. The bank does not impose special costs related to the HARP loans it writes, and interest rates are generally competitive. One advantage to arranging no-cost refinancing is that FHA guidelines only permit a HARP modification if the new terms work to the borrower's advantage in some way. By switching an existing adjustable rate to a fixed term, or by lowering the borrower's interest rates overall, James B. Nutter & Company is potentially able to write more loans through the HARP loan programs than it otherwise could.
Positioning itself as a family-owned and community-oriented mortgage lender, James B. Nutter & Company is still able to operate nationwide and offer FHA-backed home loans and HARP loan refinancing packages. By eliminating much of the research you have to do to establish eligibility, and by keeping down the closing costs, Nutter offers something approaching a full-service approach to refinancing eligible mortgages through the Home Affordable Refinance Program.
Nationstar Mortgage Review
Nationstar Mortgage maintains a nationwide presence for virtually every type of home loan available. The bank has offered HARP loans since the beginning of the program and provides convenient online access to the application, verification documents and current account status for established customers.
Based outside of Dallas, Texas, Nationstar Mortgage is a nationally accredited home mortgage lender operating in all 50 states. Since the bank's founding, in 1997, Nationstar has offered conventional loans, jumbo loans for high-value properties and federally backed loans such as VA mortgages, USDA loans on rural properties and HUD loans for low-income borrowers. Since 2009, Nationstar has offered HARP loans for refinancing eligible properties.
Refinancing your home through Nationstar begins with setting up a profile on the bank's online hub. This lets you file an application without an in-person visit, as well as facilitating the filing of required documentation and communication with your assigned loan officer. The online system is simple to get started with, though it can be slow to post updates for those who monitor their balance through the site. The online portal is accessible to customers who take out HARP loans, as these typically come with fewer verification requirements prior to approval.
Some closing costs are unavoidable when borrowing from Nationstar, though the exact amount and the expected terms for repayment vary considerably from case to case. The bank is sometimes able to offer HARP loans with no down payment, though this may be done by folding costs into the principal borrowed if the loan-to-value ratio is low enough. Federal HARP loan requirements do not include an appraisal, and Nationstar does not always require one either. This, also, is determined on a case-by-case basis for each borrower.
Nationstar Mortgage offers an accessible online system for setting up and working through your application for HARP loan refinancing. The system is plagued by slow updates, which may be the result of manual inputs instead of automatic updates, but generally has accurate, up-to-date information available about your loan status and standing balance. Nationstar offers streamlined refinancing for FHA-backed loans, and the lender may waive the requirements for appraisals and a down payment altogether, which has the potential to speed up the process while saving hundreds of dollars. Closing costs can be steep, however, and it is important to know whether a discount is genuinely being applied, or if the costs are simply being folded into the loan total.
Striving to create "a new way of looking at money," Nymeo offers HARP loans, and various other loan types, to members along with financial education and personal contact with an individual loan officer. These measures are intended to help you budget your income efficiently and cut the default rate. Applications are mostly handled online, as are payments and many of the credit union's education outreach activities.
Nymeo is a federally chartered credit union, which gives the lender significant leeway in setting loan terms and in originating HARP loans for its members. The credit union accepts members from the Frederick County, Maryland, area, as well as current members' families and domestic partners. Nymeo, the name is an anagram of "money," does not pay its loan officers commissions in an effort to keep the emphasis on customer service and in providing members with the loans that best fit their finances.
You can apply for a HARP loan with Nymeo online, via a portal that includes several mortgage calculators to help determine rates, fees and monthly payments prior to applying. Financial guidance is available throughout the process and is delivered by your personal loan officer, who is assigned specifically to your application. Credit union members have access to financial planning and budget management services online, as well as periodic classes delivered in person to help you manage your loan balance and avoid late payments. Nymeo also offers flexible repayment terms for members who are temporarily unable to pay on their loans.
Nymeo charges closing costs for most loans, including HARP loans, but the credit union does not apply lender fees or other hidden charges. Costs associated with your application and loan processing are detailed at the start of the process, and terms are available in writing prior to a commitment being made. Interest rates vary over time, but Nymeo provides current rates online and updates the figures daily to ensure accurate information for borrowers.
Working closely with borrowers, Nymeo both originates and carries HARP loans for refinancing your home. The credit union charges fees, which are due at closing, but not without first itemizing and, if necessary, explaining the fees to your satisfaction. Interest rates are updated daily on the lender's website, which helps you research your loan terms as you sign up through the online application or manage your account once it's established.
Quicken Loans Review
The refinancing process can be time consuming and slow. Quicken Loans, which handles each step of the process remotely, without the need for an in-person meeting, speeds up the process by doing its own underwriting and counseling you through the verification process. As a result, according to the company, many HARP loans close within one month of their application date. Despite this speed, however, appraisals are mandatory, and the cost is borne by the homeowner, as are the costs associated with closing.
Quicken Loans is the largest online provider of HARP loans in the United States. A subsidiary of Rock Holdings, Quicken Loans licenses its name from Intuit, the parent company for Quicken and QuickBooks. The lending arm of the company is incorporated in Delaware, but loans are offered nationwide on roughly similar terms. Starting an application for FHA-backed refinancing with Quicken Loans can be done through an online form, though company representatives can also be reached by phone or live chat.
Speed is at a premium with Quicken Loans. The lender doesn't impose any time limits, nor does it guarantee expedited service, but many of its HARP loans are closed within 30 days of the initial application. A third-party appraisal is mandatory for all home loans, including HARP loan refinances, but Quicken Loans handles all underwriting in-house, which tends to streamline the process and keep things moving quickly. Quicken Loans also establishes your eligibility by looking up your mortgage details with Fannie Mae and Freddie Mac.
When you refinance through Quicken Loans, you will be expected to pay for the appraisal and all applicable closing costs. It is possible, however, to get a waiver on paying for private mortgage insurance if your current home loan does not require it. Since HARP loans are designed to help homeowners who have lost their equity, even mortgages with negative equity can be refinanced through Quicken Loans without insurance requirements.
Quicken Loans is part of a much larger family of finance and software firms. The lending arm's unique approach of becoming an exclusively online loan provider has the effect of greatly speeding up the application and underwriting process, despite the extensive verification requirements and a mandatory property appraisal. The company does much of the research and verification for HARP loans internally, and the eventual terms may preserve favorable elements from your first loan, such as the waiver of mortgage insurance.
The process for refinancing your home through SunTrust Mortgage's HARP loan program resembles a traditional refinancing process in many ways. Many of the same fees apply, despite the federal loan guarantee, and you may be required to have your home appraised prior to approval though this is not always the case. While some HARP loan refinances may be completed with no money down, or with costs folded into the loan itself, this is not always possible, and the loan officer may be asked for expected terms before the deal is finalized.
SunTrust Mortgage is a Richmond, Virginia-based full-service bank offering a full range of home finance products, including HARP loans to homeowners nationwide. SunTrust originates and underwrites its loans, internally or with a network of partners, to issue first mortgages and refinancing packages to qualified homeowners. If your loan meets the federally mandated guidelines for HARP refinancing, it is likely to meet SunTrust's standards for issuing such loans.
Though SunTrust Mortgage does not impose many additional requirements on applicants who want HARP loans, certain terms are imposed beyond the strict federal minimum requirements. Though some borrowers might be able to refinance without an appraisal, in certain cases SunTrust will require that a recent third-party appraisal be provided before proceeding with the application. For small adjustments, which do not exceed the set loan-to-value threshold, it may be possible to fold closing costs into the body of the loan.
Other costs, however, may be due at signing, such as the standard 1-percent loan origination fee. This fee is not required by Fannie Mae or Freddie Mac, but individual lenders are not prohibited from charging you extra for originating the HARP loan in-house. In some cases, various fees may be waived, but unless the waiver has been granted in writing prior to closing, expect to owe cash at closing.
SunTrust Mortgage is a full-service bank with many home loan options. The bank's HARP loans are available to any qualified borrower with very few additional requirements imposed by SunTrust in excess of federal loan requirements. Though getting approval is relatively easy, terms and fees vary considerably. You might owe nothing at closing, or you might owe thousands of dollars. An appraisal may be needed, or not. In all cases, some additional fees are charged, which you should anticipate owing unless a specific waiver is granted before the time comes to close the loan.
As a national credit union, Thrivent can work with borrowers across the United States to provide low- or no-cost HARP loans. Refinancing terms are flexible, with both adjustable and fixed-rate mortgages being available, and costs are kept to a minimum wherever possible, according to the credit union. Thrivent markets itself as a Christian business and claims to incorporate biblical values into its lending practices.
Thrivent Federal Credit Union is a Christian faith-based lender licensed to originate loans in all 50 states. This lender offers conventional loans, VA loans and HARP loans for qualified borrowers and, as a credit union, it is wholly owned by its members.
HARP loans are available through Thrivent with a range of terms. This lender offers 15-, 20- and 30-year home loans, which may be either fixed or adjustable, and might be able to reduce your interest rate, closing costs, monthly payments or all three. Single-occupant homes, resident-owned homes and investment properties are all potentially eligible for Thrivent's HARP loan program, though multi-family rentals must have four or fewer units to qualify under HARP 2.0 guidelines. Larger properties, such as full-sized apartment complexes, are generally not eligible for FHA-backed refinancing under HARP, though Thrivent offers other products for those types of loans.
As each individual's lending situation is unique, Thrivent states it strives to provide borrowers with no-cost HARP loan refinancing. If your situation meets the credit union's criteria, refinancing may be done with no closing costs, minimal or no appraisals and a significantly reduced interest rate. Thrivent does not fold closing costs into the principal amount owed on the home loan, especially for refinancing with a high loan-to-value ratio, but in many cases, the closing costs may be waived altogether.
By publicly adopting a strict ethics policy, Thrivent hopes to appeal to values-based borrowers and establish long-term relationships with its members who collectively own the credit union. This lender offers HARP loans sometimes with no closing costs at all and has a range of fixed-rate and adjustable-rate loan terms borrowers can choose from to fit their finances.