Refinance Available In San Diego Up To 105%

As a San Diego Mortgage Broker and Banker, I have completed numerous refinances over the last few years using the government sponsored San Diego HARP program up to 105% LTV.  The San Diego Harp Program is offered on Fannie Mae and Freddie Mac owned loans and was designed to help borrowers who lost equity over the last several years refinance their San Diego Mortgage up to a 105% Loan To Value (LTV) without needing mortgage insurance.  (In my next post I will talk about an option that allows us to go up to 125% LTV).  Typically mortgage insurance would be required when the LTV is above 80%, but the San Diego HARP program gives an exemption.  The greatest benefit of this program is that it allows borrowers to lock in today’s low rates on a 30 year fixed San Diego mortgage.

San Diego Mortgage Refinance 

Let me give you an example of a refinance I just closed using the San Diego HARP program.  My clients had a first mortgage of $289,000 and an equity line of $133,000.  The value of the home came in at $308,000.  That means that the Loan to Value Ratio for the first mortgage was 94%.  Typically, an LTV this high would require mortgage insurance and fall under strict underwriting guidelines, but we haven’t taken the equity line into account yet.  The equity line makes the Combined Loan to Value (CLTV) 137%.  The CLTV is where we add the first and second loan amount together and then divide by the home value.  Under normal circumstances we could never get a loan with an LTV of 94% and a CLTV of 137%.  The lender would be taking an extreme risk by lending a combined 37% more than the house is worth.  Fortunately, the San Diego HARP program does allow it and I was able to refinance the client into a new first mortgage of $289,000 on a 30 year fixed at 5.25%.  It lowered their payments $320 per month.

San Diego HARP Refinance Program 

Let me explain the requirements of the San Diego HARP refinance program.  First off, as stated earlier, Fannie Mae or Freddie Mac has to be the current owner of your loan. This is not referring to the lender who you make your monthly payments to.  That is your servicer.  The owner refers to who bought the loan on the secondary market.  You can go to the two following websites to figure out if Fannie or Freddie owns your loan: http://www.fanniemae.com/loanlookup/ , https://ww3.freddiemac.com/corporate/

Next, the LTV has to be below 105%.  If you have a 2nd mortgage, we would have to get the current second lien holder to agree to subordinate to the first (most currently will, due to this programs availability and the fact that it puts the homeowner in a better financial position).  The file would have to be run through either Fannie Mae or Freddie Mac’s automated underwriting system and get an approval for the San Diego HARP program.  There are no minimum credit scores and the program is more lenient on debt to income ratios.  In many cases, we can get an appraisal waiver if the property value is accepted by Fannie Mae or Freddie Mac, saving the cost of an appraisal.  There are other requirements depending on the specific situation. 

Please feel free to contact me, a San Diego Mortgage Broker, if you have a scenario you want to review.  I would be happy to provide you a free quote.

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