Is using the "Home Affordable Refinance Program" a smart idea?

Here is general information about the program.

I found this in FAQ “What are the interest rate and other terms of a refinance under HARP?” “The rate will be based on market rates in effect at the time of the refinance and the homeowner will be subject to any associated points and fees quoted by your lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans must have no prepayment penalties or balloon payments.”

Honestly, I’m skeptical about refinancing schemes. A bank (like any business) is in the business to make a profit. My bank is constantly badgering me to refinance because mortgage rates are down. Why on earth would they be so desperate to make LESS money off me? My only conclusion is that they make MORE money in the long run if I refinance.

Here is the best place to ask these questions. The people here are incredibly helpful.

Loan modification can work, but, depending on your bank, it’s a long, tough, involved process. If you are considering it yourself, I’d ask in the forums I linked to about your particular bank.

We recently went through a HAFA short sale with Bank of America- it was a time-consuming nightmare.

I agee @HungryGuy, what is up with that? Your questions always rock. Where ya’ been?

@HungryGuy
Me too. This refi will not cost me any money. My loan will be a 20 year fixed at 5.125% and I will save $44,000 by only adding $49.00 to my monthly payment. I am 3 years into my 30 year fixed loan and my home is worth $60,000 less than original cost. This program is supposedly funded by us tax payers. I get closing papers soon. I do not need an appraisal either. It has been no work so far.

@optimisticpessimist @crisw
Thank you!

Okay @radcliff, ‘splain to me how you are three years into a 30 year mortgage, fixed mortgage, and you won’t pay to refi to a 20 year fixed without it costing you anything additional. What was your original interest rate? Had to be more than…what 5.5 or 6? I have a thirty year at nealy 4 percent. One percentage point makes a big difference in the monthly payment.,

@bkcunningham
Original interest rate is 6% on my 30 year fixed. My new loan would change to a 20 year loan period at 5.125 % fixed.
I am qualified for a HARP loan. I would only pay $49.00/month more and shorten my loan and save $44,000 for theloan period. It sounds to good to be true but so far I have done no work and my closing docs are in the mail.

@bkcunningham
No closing costs that I need to pay. Zero. My bank will notorize for free also. There must be some incentive from government for Freddie Mac Investment that my loan is through. Wells Fargo is the bank.