• Skip to main content
  • Skip to primary sidebar

Make Money Make Cents

Making Cents of Your Money

February 8, 2012

Finally Refinancing With HARP 2.0

Do you have a mortgage? Do you owe more money on that mortgage than the actual property is worth? If you answered yes to both of these questions, you are in the same boat as I am.  I bought my condo in April of 2008 as an investment (HAHA), and never thought things would get as bad as they are.  I had a 6.5% interest rate on the loan, and have wanted to refinance for years.  I was unable to do so because I was upside down (lingo for owing more than its worth).

 

 

Then there was HARP

The government came up with a program called the Home Affordable Refinance Program, or HARP.  This program allowed homeowners to refinance their loans if their Loan to Value, or LTV was 105%.  That means if you have a mortgage for $100,000, you could refinance a loan up to $105,000.  HARP had stipulations of course, but was a step in the right direction for anyone that was upside down.  Unfortunately, my LTV at this point was around 110%.  That meant I couldn’t refinance under HARP.

HARP updated, 125% LTV

Eventually, the government moved the LTV limitation up to 125% in order to entice more people to refinance.  At this point, I was around 130% LTV.  Condos were hit extremely hard and I had lost around 40% of the value of my condo in less than 3 years.

 

HARP 2.0

Finally a chance to refinance and lower my rate!!! In November of 2011, the government announced that they were taking away the LTV limitation on the HARP program.  This is the break I had been waiting for.  The value of my condo is still around 133% LTV, but with the removal of the LTV cap, I can finally refinance.

It looks like I will be refinancing at a 4.875% rate.  Refinancing under HARP increases the rate, and the LTV also affects what rate you get.  Once the refinance is finished, I will save around $130 a month.  It will take around 18 months in order to make up the costs to refinance.

In the end, I am happy I can finally refinance and lower my rate.  I am upset that I jumped into buying my condo instead of waiting.  I was 21 years old, and couldn’t wait to have a place.  Life is full of lessons, and every mistake is a lesson learned.  I am thankful that I have a home, a job, and can now save a little more money!

Filed Under: Mortgage

Primary Sidebar

Recent Posts

  • Ways to Pay Your Bills and Debt that You May Have Not Thought of
  • Why Budgeting is Essential for a Prosperous Financial Future
  • Do not get confused with making the decisions
  • What Do The Baby Boomers Need Now?
  • Mistakes You Do Not Want To Make With Life Insurance Policies

Categories

  • Auto Loans
  • Banking
  • Budget
  • Contest
  • Credit
  • Credit and Debit Cards
  • Fraud
  • Goals
  • Home Equity
  • Interest Rates
  • Investments
  • Loans
  • Make Money
  • Mortgage
  • News
  • Personal Finance
  • Property
  • Retirement
  • Saving Money
  • Students
  • Taxes
  • Uncategorized

Copyright© 2022 · Brunch Pro Theme by Shay Bocks