Posted on: 14th Apr, 2009 07:59 am
I went through the process of trying to refinance my loan (Freddie Mac) to a lower rate with Countrywide under the Home Affordable Refinance (HASP) program.
My current rate is 6.25%. They said the best I would qualify for under the HASP would also be 6.25%.
Why is the rate so high?
I thought under the HASP program Freddie Mac refinances could only charge a fixed .25% fee over the wholesale mortgage rates. I was hoping for a rate around the 5.00% or less mark.
All my FICO scores are above 800. I have a stable job, single family home, no car payments, no credit card debt.
My original conforming $241,000 loan (single mortgage) in 2006 was 80% LTV. My current balance is $233,000 and I'm told the current value of my house is $250,000 (LTV is now 93%)
They said the best option is an FHA with 4.875% rate but this would roll in $12000 of costs/insurance making the new loan amount $245,000.
I'm thinking now the FHA is my only option. Are the loan-level pricing adjustments the reason for the terrible rate?
Please help.
Brian
My current rate is 6.25%. They said the best I would qualify for under the HASP would also be 6.25%.
Why is the rate so high?
I thought under the HASP program Freddie Mac refinances could only charge a fixed .25% fee over the wholesale mortgage rates. I was hoping for a rate around the 5.00% or less mark.
All my FICO scores are above 800. I have a stable job, single family home, no car payments, no credit card debt.
My original conforming $241,000 loan (single mortgage) in 2006 was 80% LTV. My current balance is $233,000 and I'm told the current value of my house is $250,000 (LTV is now 93%)
They said the best option is an FHA with 4.875% rate but this would roll in $12000 of costs/insurance making the new loan amount $245,000.
I'm thinking now the FHA is my only option. Are the loan-level pricing adjustments the reason for the terrible rate?
Please help.
Brian
Hi briank,
Generally, the interest rate should get low with refinancing under the Home Affordability plan. But the 6.25% that you are paying at present, is it towards the interest only, and not to the principal? If it is an initially low teaser rate, the rate will get adjusted in future and you will end up paying more in the long run. From that point of view, paying a fixed 6.25% throughout the life of the loan can help you save a lot of money. However, the loan level pricing adjustments could be a reason for the rise in the interest rates, without which the rate could well have a little less than what it is at present.
Generally, the interest rate should get low with refinancing under the Home Affordability plan. But the 6.25% that you are paying at present, is it towards the interest only, and not to the principal? If it is an initially low teaser rate, the rate will get adjusted in future and you will end up paying more in the long run. From that point of view, paying a fixed 6.25% throughout the life of the loan can help you save a lot of money. However, the loan level pricing adjustments could be a reason for the rise in the interest rates, without which the rate could well have a little less than what it is at present.
This current loan a standard 30 yr fixed (principal + interest) and the one I want to refinance to will also be a 30 yr fixed. The way I see it is the 1.5% loan-level pricing (6.25% - 4.75%) is over $100,000 in extra interest payments over a 30 yrs period which I'm sure is not the spirit/objective of the Home Affordable Refinance plan. I cannot seem to find any information on realistic examples of what people can expect to get under this HASP program with a Freddie Mac loan.
Didn't sign in for last post.......
My current loan is a standard 30 yr fixed (principal + interest) and the one I want to refinance to will also be a 30 yr fixed. The way I see it is the 1.5% loan-level pricing (6.25% - 4.75%) is over $100,000 in extra interest payments over a 30 yrs period which I'm sure is not the spirit/objective of the Home Affordable Refinance plan. I cannot seem to find any information on realistic examples of what people can expect to get under this HASP program with a Freddie Mac loan.
My current loan is a standard 30 yr fixed (principal + interest) and the one I want to refinance to will also be a 30 yr fixed. The way I see it is the 1.5% loan-level pricing (6.25% - 4.75%) is over $100,000 in extra interest payments over a 30 yrs period which I'm sure is not the spirit/objective of the Home Affordable Refinance plan. I cannot seem to find any information on realistic examples of what people can expect to get under this HASP program with a Freddie Mac loan.
Hi briank,
In that case, an FHA loan would be a better option for you. I think you should go for an FHA loan to refinance your current loan, even though it will increase the new loan amount.
In that case, an FHA loan would be a better option for you. I think you should go for an FHA loan to refinance your current loan, even though it will increase the new loan amount.
Hi Briank:
I contacted Countrywide and they offered an interest rate of 5.125% for 30 years fixed under the HASP program. Loan fees did not exceed $1,100. Try contacting Countrywide at 1.800.720.3758 and see what they say.
I contacted Countrywide and they offered an interest rate of 5.125% for 30 years fixed under the HASP program. Loan fees did not exceed $1,100. Try contacting Countrywide at 1.800.720.3758 and see what they say.
Hi
Dooky, this is great that your loan has been modified by Countrywide and the interest rate has indeed come down to 5.125% under the Home Affordability Plan. I also think that Briank should contact his lender regarding the modification of the loan and if they fail to provide a refinance plan with a reduced rate, he should contact some other lender because the 6.25% interest is just too much to pay.
Dooky, this is great that your loan has been modified by Countrywide and the interest rate has indeed come down to 5.125% under the Home Affordability Plan. I also think that Briank should contact his lender regarding the modification of the loan and if they fail to provide a refinance plan with a reduced rate, he should contact some other lender because the 6.25% interest is just too much to pay.
Brian, with the information given you seem to be eligible to refinance conventionally or FHA. With your credit being over 740 and the Loan To Value ratios exceeding 90%, there is a program with with a reduced Mortgage Insurance payment which will benefit you on a monthly basis. Within this program you can cut your proposed monthly Mortgage Insurance payment in half and save you up to $3,000 annually. I hope this helps...
Login is very sensative on this site. I did the last post which came up as a guest. I hope this benefits everyone....
I have been trying to get my loan refinanced with Bank of America. My initial loan was with Freddie Mac, Boa has been quoting HASP rate @ .35% to .375% higher than the market rates. Therefore if the market rates is 4.75 then they quoted me a HASP rate of 5.125% why the difference, I have not defaulted, my credit history is better if not the same but I cant seem to get the market rate. Nor does the HASP rate quoted seem to change with the market!
I realize part of what HASP intends is to disregard property values and income but it kind of defeats the purpose if we cant get the same rates as the market. The reasoning I was given was that the HASP loans are riskier????
I realize part of what HASP intends is to disregard property values and income but it kind of defeats the purpose if we cant get the same rates as the market. The reasoning I was given was that the HASP loans are riskier????
We are looking to refinance our mortgage and take cash out so that may replace our failing septic system, and reinsulate/reside our house. WE do not have a good credit score and are currentlyu struggling to meet all the debt we ahve each month. We are wondering if we would qualify for a HASP loan, or any assistance. If weouc could spreadh the debt we currently have out over 30 years we could afford the dbt we currently have.
Hi Mindy,
It will be very difficult for you to get a refinance loan if your credit score is not good and if you are struggling to make monthly payments towards your debts. No lender would want to offer you loan if they are not sure if you can afford the monthly payments.
You can check out with your lender if you qualify for the Home Affordability and Stability Plan announced by the Obama Govt. In case you have too much of recurring debts, you may try and consolidate them to pay off over a certain period of time or you can go for a settlement as well. Once the amount of your debts is under control, you can afford to make your mortgage payments and also qualify for cash out refinance.
Hi Abe,
The qualification criteria and the interest rates for refinance under the Home Affordability and Stability Plan (HASP) depends a lot on an individual lender and your particular situation. Thus, the interest rate would vary depending on your situation and various other factors. However, if you have never defaulted on the loan and your credit is good, the interest rate on the refinance loans should not vary too much from the current rate prevailing in the market.
It will be very difficult for you to get a refinance loan if your credit score is not good and if you are struggling to make monthly payments towards your debts. No lender would want to offer you loan if they are not sure if you can afford the monthly payments.
You can check out with your lender if you qualify for the Home Affordability and Stability Plan announced by the Obama Govt. In case you have too much of recurring debts, you may try and consolidate them to pay off over a certain period of time or you can go for a settlement as well. Once the amount of your debts is under control, you can afford to make your mortgage payments and also qualify for cash out refinance.
Hi Abe,
The qualification criteria and the interest rates for refinance under the Home Affordability and Stability Plan (HASP) depends a lot on an individual lender and your particular situation. Thus, the interest rate would vary depending on your situation and various other factors. However, if you have never defaulted on the loan and your credit is good, the interest rate on the refinance loans should not vary too much from the current rate prevailing in the market.