Traditional refi vs HAMP vs HARP

I’d appreciate feedback from anyone who has done a HAMP or HARP loan. I currently have a Fannie 30 year fixed loan @ 5.75 that was originated in 2005\. I am up to date on my payments and have not been late on my payments for the past 5 years. I’m looking to refi, but I don’t think I have enough verifiable income to qualify for a traditional refi. I have $6000 in monthly rental income and my spouse has about $2000(however, she is not on the original note). My current servicer only offers HAMP loans. Since I’ve managed keep up with my payments, loan modification seems like a really severe remedy. Before I jump into applying for HAMP loan, I wanted to learn more about HARP; specifically the income requirements(DTI) and credit scores(Mine is mid to upper 600, wife’s not so good..)

bagofbricks

in Mortgage 11 years and 7 months ago

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mortgagepro | 11 years and 7 months ago

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You are correct to be shying away from any Modification as modified loans tend to be excluded from any other beneficial refinance programs that may be available in the future. As your loan was purchased by Fannie Mae prior to June 1, 2009 it is HARP eligible, which can prove very beneficial for borrowers with higher Loan To Values (LTV) and higher Debt To Income (DTI) ratios as these levels are extended higher than standard Underwriting guidelines. HARP was set to expire this year, but has now been extended until Dec 31, 2015. Underwriting Approvals are obtained via Fannie’s Desktop Underwriting (DU) and will be evaluated under the DU Refi Plus guidelines. Whether or not you will qualify cannot be answered in this post, but I would welcome the opportunity to discuss your specifics if desired. Keep in mind that you may have certain line items on your Federal Tax Return that can be added back as income (i.e. depreciation is a common one, as this is a paper write off that is added back as qualifying income.) On a related subject, Underwriting guidelines for standard loan products are set to be tightening in January 2014\. I mention this as, for many, Debt to Income ratios are one of the most critical components for qualifying for financing, and the DTI ratios will be set more stringent in 2014. -Adam Roberts South Shore Mortgage NMLS# 1310 631-956-0111 x218 adamr@fast2fund.com