Perhaps one of the biggest expenses that most homeowners face is their mortgage. Fortunately, however, there are ways to save on your monthly mortgage payments! Whether you already have a mortgage or are considering applying for your first home loan, here are some tips and… Read More

Perhaps one of the biggest expenses that most homeowners face is their mortgage. Fortunately, however, there are ways to save on your monthly mortgage payments! Whether you already have a mortgage or are considering applying for your first home loan, here are some tips and… Read More

The HARP refinancing program for homeowners was introduced under President Obama by the Federal Housing Finance Agency in March 2009. Unfortunately, this program was set to expire at the end of December 2016. Fortunately, however, a recent extension of the program means that it’s not… Read More

The HARP refinancing program for homeowners was introduced under President Obama by the Federal Housing Finance Agency in March 2009. Unfortunately, this program was set to expire at the end of December 2016. Fortunately, however, a recent extension of the program means that it’s not… Read More

Perhaps one of the biggest expenses that most homeowners face is their mortgage. Fortunately, however, there are ways to save on your monthly mortgage payments! Whether you already have a mortgage or are considering applying for your first home loan, here are some tips and… Read More

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Open the Door to Mortgage Savings By Doing This

Perhaps one of the biggest expenses that most homeowners face is their mortgage. Fortunately, however, there are ways to save on your monthly mortgage payments! Whether you already have a mortgage or are considering applying for your first home loan, here are some tips and tricks to help you to save more.

Saving Money on Your First Home Loan

1. Buy a Smaller Home Than You Can Afford

It sounds like a no-brainer, but just because you can afford a monthly payment of $1,200, doesn’t mean that you have to afford a monthly payment of $1,200. The same thing goes for pre-approval. Just because you have been pre-approved for a mortgage of a certain amount doesn’t mean that you have to use that entire amount when purchasing your home!

When shopping for your first home, buy what you need rather than what you can afford. For example, if you can afford a five-bedroom home but have no plans of having a large family, buy a smaller home that suits your needs. This will create smaller monthly payments for you and allow you to make more frequent payments and pay your mortgage off sooner.

2. Make a Larger Down Payment

If you have the means, when purchasing your first home, make a larger down payment. Don’t overstretch your budget, but if you can comfortably afford a 25% down payment, make it! A larger down payment will not only reduce your monthly mortgage payments, but it will also get you a lower interest rate on those monthly payments.

A larger down payment up front will save you more money in the long run.

3. Negotiate the Price of Your Home

If you are in a position where it is possible, negotiate the price of your home. This will require a little research on your part, but the savings will be worth it.

  • Look at the average home price around the area of your potential new home. This knowledge will give you more bargaining power if a home is overpriced.
  • Understand the seller’s motivation for selling. A seller who is selling their home due to financial need is going to be more accepting of a lower (but reasonable) offer. A seller whose home has been on the market for two years is also going to be more accepting of a lower offer. A seller who is financially stable but in no rush to sell, however, is less likely to negotiate.
  • Ask the seller to concede. If the seller won’t negotiate the price, try to roll other costs into the purchase. For example, ask the seller to cover closing costs or to replace the roof of the home.

4. Know Your Credit Before You Shop

Knowing the status of your credit will put you in the position to get the best rate on your mortgage. If you know that your credit is poor, consider postponing your home purchase while you try to repair some of that credit by addressing debts. If you know that your credit is good, however, know that you can shop around with lenders for better rates. Use your good credit to your advantage!

Keep in mind that while you may be excited to buy your first home, your mortgage can be a 30-year commitment. Making that 30-year commitment with poor credit will result in high-interest rates and unnecessary expense.

5. Look into an FHA Loan

If you are coming up short when it comes to a down payment, look into an FHA loan. Depending on your credit score at the time of application, approved FHA borrowers may pay as little as 3.5% on their home as a down payment. Even with poor credit, FHA borrowers can obtain a mortgage with as little as a 10% down payment.

Saving Money with Your Existing Mortgage

1. Add Something Extra to Your Monthly Payments

You can save money on your mortgage by adding a little something extra to your monthly mortgage payments whenever possible. Whether you add $5 this month, $100 next month, and $1,000 the month after that, those extra payments go towards the principal of your mortgage.  Over time those additional payments will add up and result in paying your mortgage for a shorter period of time.

2. Address Your Private Mortgage Insurance

If you made less than a 20% down payment when you purchased your home, you were more than likely forced to purchase private mortgage insurance. If you had to purchase private mortgage insurance but have since paid enough on your mortgage to bring your balance under 80% of the home’s value petition your lender to cancel your PMI.

3. Relocate Savings

Don’t ever funnel all of your savings into your mortgage, but if you have a comfortable cushion of savings for retirement, consider relocating a portion of that to your mortgage payment. Paying off a lump sum in this way will reduce the interest you pay on your mortgage in the long run and wind up saving you more money.

Just remember that if you do use your savings, you need to funnel that money back into your savings account as soon as possible so you aren’t short come retirement!

4. Make Extra Payments on Your Mortgage When Possible

When you are able, for example, if you receive a windfall or a tax refund, make an extra payment on your mortgage. Making a full extra payment will deduct that full amount from your mortgage principal and reduce the length of your mortgage and the interest you pay over time.

5. Refinance Your Existing Mortgage

If, at the time of your home purchase, your credit was poor or your down payment was low, consider refinancing. Refinancing may or may not be possible depending on the age or your mortgage, your credit, and the current financial climate, but if it is possible, it can drop your interest rate dramatically. Less interest paid means less money wasted!

Homeowners Still Have Time Before Deadline Ends

The HARP refinancing program for homeowners was introduced under President Obama by the Federal Housing Finance Agency in March 2009. Unfortunately, this program was set to expire at the end of December 2016. Fortunately, however, a recent extension of the program means that it’s not too late for some homeowners to cash in on the savings!

What is the HARP Program?

The purpose of HARP or Home Affordable Refinance Plan is to make homeownership more affordable. This was achieved by lowering the loan to value percentage requirements for the ability to refinance mortgages without mortgage insurance. HARP dropped refinance loan to value percentage eligibility requirements from 105% to anything above 80%. This made refinancing more available to homeowners which then made monthly home payments more affordable. This was possible by taking the high-interest loans and either reducing fixed interest rates or converting adjustable rate mortgages to fixed rate mortgages.

We recommend This Program. It’s one of the only reputable sources for finding the lowest mortgage rates in the nation, and will tell you exactly how much your savings per month will be, compared to your current rates. It only takes 2 minutes to see if you will actually save money – Try it Now – Here’s their Official Site.

Why Did HARP Come About?

In 2008, the housing bubble burst. When this happened, the number of houses for sale rose dramatically which, in turn, sent property prices crashing. This set of circumstances meant that homeowners found themselves owing more on their mortgages than their property was worth.

Couldn’t these homeowners refinance once the housing market started to bounce back? Most banks at the time required homeowners to have a loan to value ratio of 80% or lower in order to qualify for refinancing and this eliminated the vast majority of homeowners affected by the real estate market crash. This also meant that in order to refinance, homeowners would have to purchase mortgage insurance to make their refinance less of a risk to financial institutions.

This is where HARP originates. In 2009, the Federal Housing Finance Agency introduced HARP as a way to assist those still in crisis with their mortgages. By reducing the loan to value eligibility requirements for refinancing mortgages without mortgage insurance, HARP hoped to rebuild stability in the housing market.

The 5 Qualifying Criteria for the HARP Program

In order to be eligible to get in on the benefits of the HARP program, you must meet the following 5 criteria as well as act before the HARP program is ended.

  1. Your home loan must be backed by or owned by Freddie Mac or Fannie Mae.
  2. The current ratio of your home loan to home value is more than 80%.
  3. You have no more than one late mortgage payment in the last year and no late payments of 30 days or more in the past 6 months.
  4. Your home must be your primary living place, second home, or investment property.
  5. Your home mortgage must have originated on May 31, 2009, or before.

HARP 2.0

In December 2011, the HARP program was revamped. This new version of HARP made refinancing for homeowners even easier by allowing homeowners to refinance with any lender. The prior version of HARP allowed homeowners with private mortgage insurance to refinance, however, it required the new mortgage to cover the same amount of mortgage insurance as the homeowner had with their previous mortgage. This requirement made many lenders reluctant to refinance mortgages which carried private mortgage insurance. By revamping HARP to allow homeowners to refinance with any lender, more avenues for refinancing were opened.

Harp 2.0 also established higher mortgage rates for refinanced properties that were not serving as places of owner occupancy. Additionally, homeowners were now permitted to forego home appraisals, but only if there is a reliable automated model of valuation available in the area in question.

HARP 3.0

Although reference was made to further expanding savings for homeowners under the HARP plan, HARP 3.0 never came to fruition. Referenced in 2012 by President Obama, the third reincarnation of the HARP plan was to assist responsible homeowners in saving around $3,000 per year on their mortgages. It was also rumored that the plan was going to expand eligibility for HARP refinancing to mortgages with lenders other than Fannie Mae and Freddie Mac.

While the third incarnation of the HARP program never came into being, there is still time to apply for refinancing under HARP 2.0.

Applying Under the Current HARP Program

Assuming that your current mortgage meets the criteria established by the federal government for the HARP program, how do you go about applying for HARP?

Firstly, it’s important to know that mortgage servicers may implement their own additional regulations over refinancing under HARP.

Secondly, if you have successfully applied for refinancing under the previous version of HARP, know that you are not eligible for HARP 2.0.

Lastly, if you are interested in applying for refinancing under HARP, begin the process by contacting a mortgage lender who offers to refinance under HARP. Complete the application process with that lender making sure that you are familiar with any additional requirements of the lender.

What to Do If You Are Refused Refinancing Under HARP 2.0

If you are refused refinancing under HARP 2.0 when applying with one lender, it is worth talking to a second lender about a HARP refinance. You may still be approved, but only if the refusal is based on non-qualifying criteria. For example, if you are refused HARP 2.0 refinancing because you have already refinanced under the original version of HARP, you will not be able to gain approval from any HARP 2.0 lender. If, however, you are refused HARP 2.0 refinancing due to lender requirements rather than federal requirements, try consulting a second lender.

We recommend This Program. It’s one of the only reputable sources for finding the lowest mortgage rates in the nation, and will tell you exactly how much your savings per month will be, compared to your current rates. It only takes 2 minutes to see if you will actually save money – Try it Now – Here’s their Official Site.

The End of HARP

HARP was originally scheduled to be terminated on December 31, 2016. In August of 2016, however, the Federal Housing Agency agreed to extend the program to September of 2017. What does this mean? It means that in order to benefit from a reduced mortgage rate under the HARP program, you must act now!

Is it possible that HARP will be extended once again? While it is entirely possible that HARP 2.0 could be re-extended, it is doubtful. Under the current administration, there has been a general pattern of overhaul and desire to create new programs rather than adjust those already in place. So, with that said, it’s a good time to consider HARP 2.0!

Homeowners Still Have Time Before Deadline Ends

The HARP refinancing program for homeowners was introduced under President Obama by the Federal Housing Finance Agency in March 2009. Unfortunately, this program was set to expire at the end of December 2016. Fortunately, however, a recent extension of the program means that it’s not too late for some homeowners to cash in on the savings!

What is the HARP Program?

The purpose of HARP or Home Affordable Refinance Plan is to make homeownership more affordable. This was achieved by lowering the loan to value percentage requirements for the ability to refinance mortgages without mortgage insurance. HARP dropped refinance loan to value percentage eligibility requirements from 105% to anything above 80%. This made refinancing more available to homeowners which then made monthly home payments more affordable. This was possible by taking the high-interest loans and either reducing fixed interest rates or converting adjustable rate mortgages to fixed rate mortgages.

Why Did HARP Come About?

In 2008, the housing bubble burst. When this happened, the number of houses for sale rose dramatically which, in turn, sent property prices crashing. This set of circumstances meant that homeowners found themselves owing more on their mortgages than their property was worth.

Couldn’t these homeowners refinance once the housing market started to bounce back? Most banks at the time required homeowners to have a loan to value ratio of 80% or lower in order to qualify for refinancing and this eliminated the vast majority of homeowners affected by the real estate market crash. This also meant that in order to refinance, homeowners would have to purchase mortgage insurance to make their refinance less of a risk to financial institutions.

This is where HARP originates. In 2009, the Federal Housing Finance Agency introduced HARP as a way to assist those still in crisis with their mortgages. By reducing the loan to value eligibility requirements for refinancing mortgages without mortgage insurance, HARP hoped to rebuild stability in the housing market.

The 5 Qualifying Criteria for the HARP Program

In order to be eligible to get in on the benefits of the HARP program, you must meet the following 5 criteria as well as act before the HARP program is ended.

  1. Your home loan must be backed by or owned by Freddie Mac or Fannie Mae.
  2. The current ratio of your home loan to home value is more than 80%.
  3. You have no more than one late mortgage payment in the last year and no late payments of 30 days or more in the past 6 months.
  4. Your home must be your primary living place, second home, or investment property.
  5. Your home mortgage must have originated on May 31, 2009, or before.

HARP 2.0

In December 2011, the HARP program was revamped. This new version of HARP made refinancing for homeowners even easier by allowing homeowners to refinance with any lender. The prior version of HARP allowed homeowners with private mortgage insurance to refinance, however, it required the new mortgage to cover the same amount of mortgage insurance as the homeowner had with their previous mortgage. This requirement made many lenders reluctant to refinance mortgages which carried private mortgage insurance. By revamping HARP to allow homeowners to refinance with any lender, more avenues for refinancing were opened.

Harp 2.0 also established higher mortgage rates for refinanced properties that were not serving as places of owner occupancy. Additionally, homeowners were now permitted to forego home appraisals, but only if there is a reliable automated model of valuation available in the area in question.

HARP 3.0

Although reference was made to further expanding savings for homeowners under the HARP plan, HARP 3.0 never came to fruition. Referenced in 2012 by President Obama, the third reincarnation of the HARP plan was to assist responsible homeowners in saving around $3,000 per year on their mortgages. It was also rumored that the plan was going to expand eligibility for HARP refinancing to mortgages with lenders other than Fannie Mae and Freddie Mac.

While the third incarnation of the HARP program never came into being, there is still time to apply for refinancing under HARP 2.0.

Applying Under the Current HARP Program

Assuming that your current mortgage meets the criteria established by the federal government for the HARP program, how do you go about applying for HARP?

Firstly, it’s important to know that mortgage servicers may implement their own additional regulations over refinancing under HARP.

Secondly, if you have successfully applied for refinancing under the previous version of HARP, know that you are not eligible for HARP 2.0.

Lastly, if you are interested in applying for refinancing under HARP, begin the process by contacting a mortgage lender who offers to refinance under HARP. Complete the application process with that lender making sure that you are familiar with any additional requirements of the lender.

What to Do If You Are Refused Refinancing Under HARP 2.0

If you are refused refinancing under HARP 2.0 when applying with one lender, it is worth talking to a second lender about a HARP refinance. You may still be approved, but only if the refusal is based on non-qualifying criteria. For example, if you are refused HARP 2.0 refinancing because you have already refinanced under the original version of HARP, you will not be able to gain approval from any HARP 2.0 lender. If, however, you are refused HARP 2.0 refinancing due to lender requirements rather than federal requirements, try consulting a second lender.

The End of HARP

HARP was originally scheduled to be terminated on December 31, 2016. In August of 2016, however, the Federal Housing Agency agreed to extend the program to September of 2017. What does this mean? It means that in order to benefit from a reduced mortgage rate under the HARP program, you must act now!

Is it possible that HARP will be extended once again? While it is entirely possible that HARP 2.0 could be re-extended, it is doubtful. Under the current administration, there has been a general pattern of overhaul and desire to create new programs rather than adjust those already in place. So, with that said, it’s a good time to consider HARP 2.0!