Unlike most standardized mortgage programs we've all come to recognize, there are several factors that may decide which banks can complete your current deal. Presently there are also several "pricing add-on's" with regard to various characteristics of an individual's situation which are critical to be aware of before you get started in your search regarding the best HARP 2.0 rates. Inside this particular article we'll be focusing on just how to truly coach yourself on the possible rate hits:
Best HARP 2.0 Rates - Loan Level add-on's to Watch out for:
While we'd just about all prefer to receive the lowest HARP 2.0 rates, it is imperative to recognize precisely what the various "big banks" who will ultimately service these mortgage loans view as supplemental risk aspects. The most widespread loan-level cost adjuster is L.T.V(Loan To Value). Presently there tend to be additional loan level hits regarding credit rating, property type, in addition to occupancy type (owner-occupied, investment property,2nd home, etc.). Let us initially concentrate on the most typical: LTV pricing hit:
Best HARP 2.0 Rates - Fee add-ons for LoanToValue:
Now while the most current flavor of HARP is not thought to limit the LTV, right now there are just a select few lenders in a position to accept any kind of loans exceeding 125% Loan-To-Value. In regards to pricing hits specifically, the best HARP 2.0 rates can be obtained with the lowest LTV.
For instance if your property is at 80%-85% Loan-To-Value, there should not be much of a pricing add-on at all. On the other hand, as soon as you extend past the higher LTV thresholds such as 90%, 95%, 105%, and especially the 125% LTV, now you ought to expect to pay roughly .25% higher in rate, depending on the mortgage lender. A basic general guideline when looking for the best Harp 2.0 rates is to first ask the bank if they have the ability to fulfill your deal based on your anticipated Loan-To-Value, and second, what the pricing hit will be for your expected Loan-to-Value.
Throughout your investigation for the best HARP 2.0 rates, the first concern should be, "can this particular mortgage company truly do this transaction given my home's present Loan-To-Value?"
Best HARP 2.0 Rates - Rates "Add-ons" Fee Structure for Credit and Property Type/Category:
Additional elements to take into consideration when in search for the best HARP 2.0 rates is credit rating and home style. As you would most likely expect, with sub-standard credit will come a bit higher rate. There are commonly quite few add-ons if you are at 680+ but typically there will be a small hit once you get under 660. In addition, there is a hit for home type. Particularly, condos typically come with about .125% add-on to rate (75bps to price) if the LTV is over 75%. This is an industry-wide Fannie Mae hit so plan on getting this bit higher rate if you own a condo and are over 75% LTV.
HARP Program: Presently there isn't a one-size-fits-all for this program and it's important to take all aspects into consideration when in search of the best HARP 2.0 rates.
About the Author: