New Survey By Freddie Mac Shows Many Homeowners Are Still Overpaying For Their Mortgages
By Jason Boone
Thanks to a recent survey by Freddie Mac we know that close to 1 million homeowners across the United States are overpaying for their mortgages each month.
Even though mortgage interest rates dropped to a low of 4.1% last week, for a 30-year fixed mortgage, the Freddie Mac data has shown us that most homeowners are not tapping into the resources which are available which will help them lower their monthly mortgage payments.
Home Affordable Refinance Program (HARP)
Started during the “great recession”, the Home Affordable Refinance Program has been one of the best opportunities for homeowners in Bend Oregon and across the United States to refinance their mortgages plus shave at least $200 or more per month off their monthly mortgage payments.
So far over 800,000 families across the United States have benefited from HARP and this program has helped both the consumer and lender since it’s kept more homeowners in their homes and helped lenders reduce the chances of a home slipping into foreclosure.
Millions of homeowners found themselves in a difficult predicament after the U.S. housing bubble burst in 2008. As inventories soared nationwide, home prices plummeted. Many new homeowners saw the value of their homes drop below the balance of their mortgages, or nearly so. Later, these same homeowners were prevented from taking advantage of lower interest rates through refinancing, since banks traditionally require a loan-to-value ratio (LTV) of 80% or less to qualify for refinancing without private mortgage insurance (PMI).
Take for example a house that was purchased for $160,000 but is now worth $100,000 due to the market decline. Further, assume the homeowner owes $120,000 on the mortgage. In this scenario, the loan-to-value ratio would be 120%, and if the homeowner chose to refinance, he would also have to pay for private mortgage insurance. If the homeowner were not already paying for PMI, the added cost could nullify much of the benefit of refinancing, so the homeowner could be effectively prohibited from refinancing.
Source – Wikipedia
Who Qualifies For HARP?
If your mortgage is guaranteed or owned by either Fannie Mae or Freddie Mac you qualify for HARP.
You will also qualify for this program if your mortgage loan is over 80% of your home’s value and you have been current with your mortgage payments for the last 12 months.
Before Choosing HARP or Refinancing
Regardless if you choose HARP or decide to refinance your current mortgage loan make sure that you pull your credit score first and verify what your current credit score is because it make sense to wait a few months to improve your credit score before choosing to refinance your mortgage loan.
To learn more about the benefits of refinancing your mortgage loan, HARP or the Bend Oregon Real Estate Market contact me, Jason Boone, Principal Broker at Duke Warner Realty | Skjersaa Group by calling me at (541) 383-1426 or by emailing me at firstname.lastname@example.org.