Forget the Appraisal! Lower Your Payment Now!

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Our government has rolled out numerous programs to attempt to help home owners through the extremely difficult times we have seen in real estate over the past couple years.  The acronyms of these programs have, in many cases, have become the alphabet soup of failure.

Well, one program that has already helped many home owners has just been made even less restrictive.  The Home Affordability Refinance Program (HARP) has been a great program for refinancing even for those home owners that have a mortgage balance that is up to 125% of the current value of their home.

The biggest change to the HARP program is the removal of any loan to value ratio restrictions.  Under the new rules, it doesn’t matter how far under water your mortgage is currently you will still be eligible to refinance.  In fact, most loans will not even require an appraisal, which will save money on closing costs too.

There have also been changes made to the risk based adjustments for the HARP program.  I know this sounds technical, but, in plain English, this means the interest rates will be even a bit more competitive on this program now.

One more big change that I almost overlooked when I first read the new rules is the removal of many of the reps and warranties the lenders had to agree to on the previous version of the HARP program.  This is another point that can get technical, but the new rules here will make lenders much more willing to approve loans on the outside fringes of the guidelines.  Lenders have been adding restrictions to the guidelines because of the rep and warranties, but there will be no reason to do that any longer.  Goodbye to the horrible “lender overlays” we have all been dealing with on this program.

In short, if you have been told you can’t refinance over the past couple years because you are too far underwater, now is the time to check into the refinance again.  This is an amazing opportunity for many home owners that is likely to actually have the impact desired by the government… for a change.

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