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Harp refinancing question...

I plan on refinancing using HARP 2.0 my investment property (loan amount 146k) in the next month or so from an ARM to either a 15-year or 20-year fixed. I want to be sure I get the best rate possible which leads to my question regarding LLPAs (Loan Level Price Adjustments). I understand that investment properties have higher LLPAs because of the high risk but want to know what I can do (e.g. pay more out of pocket at closing) to ensure I minimize the LLPAs. I intend on owning this property for the forseeable future and therefore would like to pay it off sooner, which is the reason I am considering a 15-year. However, if there isn't much benefit to doing a 15 year over a 20 (other than the saved interest), then I would prefer a 20 in order to keep the P&I lower. My general question is, what type of loan would best suit my needs considering my credit score (>800), loan amount ($147k), LTV (~ 80-83%), occupancy status (investment), and loan term (15 to 20 years), and what can I expect/need to know about LLPAs to ensure they are minimized? by franki_947_553 from Torrance, California. Mar 1st 2012 Reply


Steven Brand (stevenbrand)
#3 ranked lender in Minnesota - 121 contributions

We are currently hiring Loan Originators and it seems you have a better grasp on LLPA's and pricing loans than most of my competition. :) Honestly... there are a few more things to know about your situation, your liquidity, your job stability and what you plan on doing with sticking with investment properties in the near/far future. It may make WAY more sense to keep your monthly payment down so you can still qualify more easily for other loans in the future instead of SMACKING your DTI with a higher "required payment" of a shorter term. Sometimes its not about just rates and fees but about how THIS particular loan is going to fit into your short and long term financial goals and your plan for Wealth Creation.Steven Brand at iLoan 612.386.5306 www.StevenBrandHomeLoans.com and www.iLoanHomeMortgage.com

Mar 1st 2012
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

Hey Frank... current rates are great, and I would recommend going 30 year fixed right now. Although the payment is lower on a 15 year mortgage, that product will not be available until June 1st. If rates go up, which is a good possibility, then any benefit you would have gained by waiting for the lower terms to be released is offset by the rise in rates.. It's possible that 20 year terms are available, however most lenders price 20 year mortgages the same as a 30. As far as LLPA's, investors will be a flat 2%, unless your under 80% LTV, then it could be 1.5%, but this depends on the lender and very few have released their HARP 2.0 rate sheets. Best advice I can give you is to contact a local mortgage broker, not a bank, and start your application.. With a broker, he will have many lenders he can tap into to find the best loan for your particular scenario.. WilliamAcres.com

Mar 1st 2012
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Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 2,431 contributions

I agree with William's logic regarding not waiting. I would not be the least bit surprised to see lenders creep rates up to slow volumes because they are expecting to be slammed. I have friends at two of the biggest banks hinting strongly that high volume and long turn times are expected shortly after the launch.On an investment property, you could easily lose the rate benefit by waiting. As far as LLPA's, What I am hearing is that ALL lenders will have to accept the LLPA as mandated by FNMA/FHMC under HARP or they cannot play. This would mean that there shouldn't be any variations in LLPA from one participating lender vs another. Don't forget to 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 1st 2012
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