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Millions of American Homeowners Could Refinance and Save with HARP

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This post brought to you by Quicken Loans. All opinions are 100% mine.

by Clayton Closson

You read that title correctly.

An estimated 2.7 million American households could refinance to today’s mortgage rates (which are near historic lows, in case you haven’t been paying attention) through the gov’s HARP program. And they can do it even if they owe more money than their home is worth. Up to 200%. But they aren’t. And we don’t know why.

Why don’t they want to lower their mortgage payment?

Why don’t they want to shorten the term of their loan?

Why don’t they want to save thousands in mortgage interest?

We wish we knew, because then we could reach out to them and explain why they absolutely should take advantage of HARP while it’s still around. Which brings up some good news for American homeowners. HARP has been extended through 2015. That’s a good thing. The bad thing is that mortgage rates most likely won’t stay as low as they are for very long. At some point, once rates rise, the ability to save money with HARP may be diminished.

Jordan Fylonenko recently met with Quicken Loans Chief Economist Bob Walters to discuss HARP and what’s going on with the millions of folks who haven’t taken advantage of it.

Before we show you the video, here’s some info on HARP from our Press Room:

The FHFA’s announcement to extend the HARP deadline to 2015 is much needed for the estimated 2.7 million underwater homeowners who are eligible and still able to benefit by refinancing. Unfortunately, a too-good-to-be-true perception coupled with long lines to refinance and repeated “no’s” from lenders who are not utilizing HARP to its fullest extent have left many disgruntled to enter another arduous loan process. But for those homeowners needing a personal stimulus, picking up the phone again is well worth it.

The average savings from a HARP refinance is around $200 a month with an average rate reduction of 1.75%, resulting in $2,400 savings per closed loan per year and $74,000 per lifetime (assuming a 30-year mortgage). The potential stimulus for the economy is even more significant, reaching up to $6.5 billion ($2,400 in savings a year per consumer x 2.7 million consumers).

These savings are more than just numbers on a spreadsheet. A Quicken Loans client and active duty Air Force recruiter from Sacramento, CA, was able to cut $763 off his monthly payment for his investment property and lowered his rate down by more than a point through HARP. This was after his original lender told him they couldn’t help.

Another Quicken Loans HARP client from North Brunswick, NJ, was able to save $387 on his monthly payment and lower his rate by more than a point to 3.85%.

In a monthly video series, Markets and Musings, Quicken Loans Chief Economist sat down to discuss some of the recent changes that have opened up HARP to more underwater homeowners.HARP

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Last updated on July 3, 2013.

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4 Responses to “Millions of American Homeowners Could Refinance and Save with HARP”

  1. Captain Betty says:

    Word of caution: If your loan cannot be re-done with the original signers, you won’t be able to close and you may be out about $400 for an appraisal.

    I tried going through Quicken Loans, said everything was on the up-and-up, had the appraisal ($400), then came to closing – oops… your wife needs to be on the loan since that’s how it was originally written (wife’s credit is in the crapper so, they suggested leaving her off the loan) – sorry we cant continue – sorry you’re out $400.

    • Lazy Man says:

      They should refund your money if they suggested you leave her off the loan and then required her to be on the loan. That’s just conflicting and poor advice.

      As someone who has refinance 3 properties in the last 10 months or so, I always try to make sure that they’ve done everything they need to before the appraisal, because I know the appraisal is not going to be an issue. At least with my properties sites like Zillow and Trulia are very accurate. In most cases, they should know in advance whether the appraisal is even going to be a borderline issue.

  2. Home Owner says:

    We looked into refinancing a few times with the HARP program. Unfortunately, they add on PMI that no longer can disappear at 80/20 ratio. Plus it’s at a higher rate than we currently pay for PMI. We’d have to pay down the loan so much to get rid of PMI, that it makes sense for us to put our home on the market and pay the difference to get out. We don’t plan to stay, so the costs are too much for us to make that money back. They also don’t make it easy to refinance, and charge high fees to do so.

  3. Malcom Forster says:

    We also looked at refinancing our home mortgage, and in addition to that we took a car title loan, to allow us to better handle and cope with our monthly spending. Thanks to these two changes, we’re up on our feet again and “breathing”! The refinance program was simple and the fees were very attractive!

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