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Are HARP 2 interest rates the same as if someone is buying a home with a 20% down payment?

Are HARP 2 interest rates the same as if someone is buying a home with a 20% down payment? by gabbyq_101_948 from Sherwood, Arkansas. Mar 12th 2012 Reply


William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions

In short, no... HARP rates will be higher, and they should be... A lender is financing a property with an "Unlimited" loan to value, and exposing themselves to huge losses in the event of a loan default... rates are determined by a Risk Vs. Reward... the greater the risk, the higher the reward (rate) will be... on the surface, someone putting 20% down on a new home purchase is a very safe product, and has one of the lowest default rates of any mortgage product out there... WilliamAcres.com

Mar 12th 2012
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Michelle Garcia (MyGarciaTeam)
#52 ranked lender in Washington - 6 contributions

No...HARP rates will be slightly higher. However slightly higher, the HARP rates are still great rates especially considering the risk.

Mar 12th 2012
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Melvin List (melvinlist)
#143 ranked lender in Florida - 124 contributions

This really depends on the scenario when comparing apples to apples. I actually priced out a HARP loan that was lower than a conventional loan based on a 677 score last week.I only lend in Florida!

Mar 12th 2012
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Linda Miller (Linda Miller)
#2 ranked lender in Utah - 572 contributions

I agree with most of the answers that HARP rates will be higher - but they are not that much higher. I just quoted a HARP loan and it was only .125% higher than same loan with 20% down. The borrower was saving over $200 a month so it was still worthwhile for her to refinance. Find a good broker in your area on Lender 411 and see if it makes sense for you to refinance.

Mar 12th 2012
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Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 2,431 contributions

No. When someone buys a home with 20% down, you are assuming a big part of the risk, because you are making an investment too. The bank is only lending 80% of what the home is worth. Under HARP, they are lending against "Phantom Value" because they are lending more than 100% of the value of the collateral. This means they will charge more for the additional risk they are willing to take. Whatever you do, Don't use the big banks. Don't forget to check out your selected Mortgage Originator at the National Mortgage Licensing System at www.NMLSConsumerAccess.org ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com

Mar 13th 2012
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