I had a meeting today with my financial advisor. I needed to get some things in order for my family and my retirement. Anyway, while I’m in the meeting my advisor’s boss asks me what’s new in lending, you know products, rates, etc. I tell him business is good, rates are ridiculous, and the HARP program has really helped keep lending going.
Like it or not, the government intervention has keep the real estate market from completely imploding (Yes, it could have been worse). The low rates provided by our Fed along with the HARP program have really helped millions of families lower their housing costs.
He asked? “What’s HARP” After being surprised that a senior financial advisor doesn’t know, I realized that with all the marketing out there, many still have not heard about this program.
So here are the basics. HARP II allows for underwater homeowners to take advantage of today’s low rates by providing the liquidity in today’s residential mortgage market for lenders to fund these types of transactions. This program is for not only for primary residences, but second homes and investment properties qualify too.
In some cases the program HARP II will allow unlimited loan to value. And what does loan to value mean? Well if your home is worth $300,000 and you owe $600,000 your loan to value is 200%. If you home is worth 100,000 and you owe $80,000 your loan to value is 80%. Pretty simple right?
With HARP, homeowners that are underwater AND want to hold onto their properties have the opportunity to lower their overall mortgage payments on these properties. This helps keep homes out of foreclosure and ultimately keeps property values higher as reduced inventory creates limited options to today’s home buyers who have begun bidding up properties in many areas.
You need to make sure your mortgage is owned by Fannie Mae or Freddie Mac and needs to have been funded prior to June 2009. But these rules may change soon too.
Although we are not out of the woods. A recent study shows 50% of Nevada homeowners are still underwater. But the private market has begun to come back into lending with unique programs for self-employed borrowers and borrowers with less than perfect credit or who may not be able to show as much income as needed on their tax returns.
The bottom line, it makes sense to talk with your mortgage advisor (like me www.michaelfoote.com) about ALL the options that are available for you and what is best for your short and long term homeownership goals.
So give me a call or email me today.