What You Need to Know When Shopping for a HARP Loan
Not every lender has the same HARP loan rates and qualifying requirements for homeowners in Florida. Some lenders cap homeowners at 125% loan to value, while others have no loan to value restrictions. In layman terms, some mortgage lenders care how upside down you are on your mortgage loan and some don’t.
Here are two most important things to know when shopping for a HARP Loan:
- Every mortgage lender has different mortgage rate offers. The more upside down you are on your mortgage, the higher the mortgage interest rate. Banks justify higher pricing based on risk. This is why the rates on a HARP loan are typically higher than regular conventional 30 year fixed rate mortgages. Typically, HARP loan rates are anywhere from .25% to 1% higher than traditional mortgage rates. All mortgage lenders or mortgage brokers price their rates based on their desired profit margin. This is especially why you need to shop and compare the rates on a HARP loan with at least 3 different mortgage companies.
- Mortgage lenders’ minimum credit score requirement for HARP loans also vary from one to another. Some require a minimum credit score of 640 and some have no minimum credit score requirements. This is true as long as Fannie Mae’s automated underwriting system generates an “Approve/Eligible” code. Some limit your maximum loan to value based on your credit score, while others have no minimum requirement. So when you are calling around and trying to qualify for a HARP loan, don’t get discouraged if your get turned down by the first mortgage lender.
Visit our HARP Loan page for more information on HARP loans.
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