Tampa is a beautiful city that buzzes with energy and beautiful, smiling faces. However, its housing market is pretty dismal. Trying to get a mortgage or refinance in Tampa can be as fun as getting a root canal. This is primarily due to the fact that Tampa was one of the hardest hit markets in the nation and therefore lenders are stomping down their foot and shouting “no” when it comes to offering mortgages and refinancing. Mortgage brokers in Tampa are a dime a dozen, but finding the right broker through a group of ruthless, veterans who can navigate the Tampa market mine field without even blinking once, will equip you with a guiding experienced hand to help ease you into the rank of home owner. This article will offer a basic look at how the HARP 2.0 loan may help you refinance your mortgage.
Refinancing in Tampa
There are many types of loans out there to assist people with reaching their dreams of home refinancing in Tampa. In an article published by the Tampa Bay Times, HARP (Home Affordable Refinance Program) 2.0 is praised as being the greatest factor to Florida’s market recovery. The Federal Housing Agency claims that 60 percent of all Florida refinancing sources came from HARP. The article goes on to advise readers that when it comes to refinancing, HARP is promoted as being quicker, cheaper, and containing fewer frustrations, such as not requiring a new physical appraisal. You won’t get the lowest interest rates, as most HARP loans bottom out at 4 percent, and not all banks participate in the program Therefore, you will need an experienced broker to help you overcome these headaches.
Some things to expect
Although HARP offers some great methods for homeowners to refinance, like most financial entities, you need to have a certain credit score. A minimum credit score of 620 is required to qualify for a HARP 2.0 loan. Keep in mind it is the middle score of the three reporting agents of credit (Equifax, Experian, Transunion) that banks will be looking at. In other words if you have a 688 Equifax score, a 722 Experian score, and a 644 TransUnion score, you’re reportable credit score for mortgages is 688. The high score cancels out the low score and you’re left with the middle score. So if you have one of your credit scores below 620, don’t worry too much, as long as the other two are solid, your credit will be apropos. But be warned, there is a maximum debt-to-income ratio for HARP 2.0 participants. If you have a debt-to-income (DTI) ratio of 45% or less, you qualify. In other words, if you’re total recurring debt (mortgage, credit cards, etc) make up 45% or less of your monthly income, you qualify.
To calculate this, take your annual salary and divide by 12. Then take the total of your recurring monthly debt, and divide this by your monthly income to get your ratio. Here is an example offered by Lender 411:
Annual Income (A) = $65,000
A ($65,000) / 12 = $5,416.67 = Monthly Income (M)
Monthly Recurring Debt (D) = $1,800
D ($1,800) / M ($5,416.67) = 0.3323 = 33.23% Debt-To-Income Ratio (DTI)
Talk to an expert
If you aren’t quiet sure what steps to take in preparation for the HARP loan, contact an agent and ask them to help you devise a plan of action. When you partner with an experienced broker who knows the Tampa market like the inside of his/her own home, you will be putting yourself in the best position possible to qualify.