HARP: good deal or not?
September 27, 2012 10:00 PM Subscribe
I have a mortgage that is perfectly healthy. Should/can I do a HARP refinance on it?
I bought my house in 2008 with a mortgage at 6.5% interest. It's definitely a starter house, and I'll almost certainly sell in the next couple of years. The payments are very small compared to my income (under 10%) so I have no pressing reason to do a traditional refinance. The house is definitely not underwater (actually it's probably gone up a bit, the vacant warehouse next door got fixed up and turned into an expensive restaurant).
My lender sent me a letter saying they could give me a HARP refinancing for 4.3% interest with no closing costs.
So the first question is: why is the lender doing this? Are they that afraid I'll refinance with someone else? I am suspicious that this is some kind of scam.
Secondly: how guaranteed is this kind of offer? I work insane hours and don't really have time during the day to go to a bank, meet with a broker, etc. unless it's a really worth it. I don't want to invest a couple of days of effort and find out that the lender is out of HARP refinancing slots, or whatever. Presumably they already know my credit score since they have all my information? Do they think my house is underwater, even though it isn't?
Thirdly: is it OK to take this deal, and sell my house / pay it off in a year? Or are there strings attached to the HARP program that would make that difficult or expensive?
I feel like a bit of an idiot here. Can someone explain this to me using simple sentences that someone who isn't in the real estate business can understand?