The Home Affordable Refinance Program was first announced in 2009 as a way to help underwater homeowners refinance their homes and hopefully stimulate the economy. After HARP 1 didn’t go as well as hoped, the HARP program was modified and labeled HARP 2.0 early in 2012. While HARP 2.0 is helping more homeowners than HARP 1.0 did, there are still millions of homeowners left out in the cold when it comes to refinancing their home and taking advantage of lower interest rates. As a result of these left-out homeowners, talk of HARP 3.0 is growing louder and louder and it may soon be announced.
When talking with someone who is potentially interested in a HARP refinance, I usually try to bring up 2 points:
- Not all Arizona HARP lenders are created equal
- Does a HARP refinance make sense vs. a short sale?
HARP Lenders in Arizona: Not All Lenders are Equal
When it comes to working with a lender to find out if you qualify for the HARP refinance program, keep in mind that not all lenders are created equal when it comes to the HARP program. Quite a few lenders are not actually doing HARP loans, but they broker them to other lenders who can do them.
Example: Academy Mortgage is not actually funding HARP loans, but the loan officers here can still help you with your HARP refinance by funding it through another bank.
Brokering a loan is neither good nor bad, but as a consumer you should just be aware that when a loan officer brokers a file, it often means they don’t have as much control over the file which might cause a few more bumps along the way. The best way to know what bumps are common when brokering a file is to ask your loan officer when completing the application.
HARP Refinance: Does It Make Sense?
For homeowners living in the Phoenix market, many areas have seen significant price increases in the last 12 months. Supply is short and demand is high – and many people who were once deeply under water are now at close to break-even or maybe even have a little equity in their property.
This recent trend in rising home prices is working to the advantage of anyone considering a HARP refinance because as property values rise, a short sale (the other common alternative to a HARP refinance) becomes less and less attractive.
So when asking the question “Should I do a HARP refinance or just short sell this house?” keep in mind that property values are rising and from what I can may continue to rise through at least 2013.
If you are are in the situation where the interest rate on your home is higher than 5%, be sure to ask your loan officer and/or Real Estate Agent what the pros and cons of a short sale vs. HARP refinance are.