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Harp 2 - Is This Interest Rate too High?

Emailed to us by a Consumer: We have been waiting for HARP 2 to go live and our current lender, Chase, just offered us a rate that i would like some input on. Here are the details.Current Loan Amount $300,0006.25% Interest Only ARM (adjusts in late 2013)Current Home Value $175,000Chase Refinance Offer: 4.625% - 30 year fixedClosing Costs: 3000 total (2600 rolled into loan, $395 out of pocket)Is this interest rate competitive? I am hearing that if i wait until March 15 smaller lenders may have an option to compete for my business and i could get a lower rate. Can i beat this offer or should i jump on it? (of course they are pressuring me to move fast)I appreciate any input/advice.Thank you,Bob by from , . Mar 2nd 2012 Reply


Bruce Conn (BruceConn)
#276 ranked lender in California - 19 contributions

The Rock - unless you can make a very large principal reduction in the loan balance Chase is your only resource.The Hard Spot - IF your loan-to-value was 80% or less and all credit and income were in line, you would get a 30 year loan for around 3.875%. Stay tuned here, what we are hearing about HARP 2.0 is becoming clearer by the day and there may be options I don't know yet. Best of luck!Bruce Conn

Mar 2nd 2012
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Bert Carpenter (BertCarpenter)
#38 ranked lender in Arizona - 1,823 contributions

WAIT, WAIT, WAIT. The biggest problem I see is that it looks like you are actually applying for the HARP program. In a refinance, the only out of pocket fee is typically the appraisal fee. You need an appraisal for HARP, but not for HARP 2.0. HARP caps the Loan-To-Value (LTV) at 125%. Based on your numbers you are over 170%, meaning you don't qualify for HARP. I would hate for you to pay for an appraisal and then get turned down because of this. In less than two weeks, HARP 2.0 will be out. NO appraisal needed and no LTV cap, plus pricing should be as good, or better than HARP. You will also want to avoid the big banks because they have not yet geared up enough personnel to deal with the volumes that are expected. Instead you should work with a local Mortgage Banker/Broker. Whoever you choose, make sure you check out your selected Mortgage Originator at the National Mortgage Licensing System at www.NMLSConsumerAccess.org ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com

Mar 2nd 2012
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Shon Atabaki (ShonAtabaki)
#49 ranked lender in Washington - 95 contributions

Chase should not pressure a decision prior to HARP 2.0 guidelines being baked into the automated underwriting systems available to all lenders in roughly 2 weeks. I think it makes sense for Bob to wait just a little longer for the dust to settle, because at that rate I would think that all closing costs would be paid by the lender vs. rolling them into the new loan balance. Best of luck!!

Mar 2nd 2012
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Blake Kleckner (BlakeK)
#388 ranked lender in California - 257 contributions

Hi Bob: 4.625% with $3,000 costs, if they are "true" loan costs and not for prepaid interest on the new loan, accrued interest on the old loan, or for the setting up of an impound (escrow) account, is much too high in today's market. Banks are doing no one any favors. I did a loan for a client that was 1 week away from closing with Chase and it was at .75% less than the Chase loan, saving her $300/mo. HARP 2, with unlimited LTV, probably won't be available from lenders until some time in April. Fannie and Freddie are still working out the bugs in their systems, and, most likely, won't have it ready for the lenders for 2 to 3 more weeks. Then the lenders have to do what they do to be able to process HARP 2 loans. What Chase is offering you may not be HARP 2. Don't let Chase pressure you into this loan. You have plenty of time to make a well informed decision. If what I am hearing is correct about the interest rates and pricing to expect when HARP 2 is rolled out, and depending upon your ability to qualify for the loan, I should be able to structure it for you at less than 4% with you paying about $3K for the loan, or at not cost around 4%. Give me a call 16/7, or email me, and I'll be happy to walk you through the process. To learn more about me and our mortgage brokerage, click on my picture. When the next page pops up, click on "Website" and you will be redirected to ours. We work exclusively in CA and get loans done fast, typically in less than 30 days, at low interest rates and costs. Representing 39 quality lenders that offer more than 1,000 loan programs, we definitely have something for everybody.

Mar 4th 2012
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Melvin List (melvinlist)
#143 ranked lender in Florida - 124 contributions

Wait Wait Wait.. I just had a former client go thru them because he thought that was his only option and they offered him a nice rate of 4.875%. You can do much better than what they are offering you.

Mar 7th 2012
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