Over the past few weeks many of you have contacted me asking me to either assist you with your HASP refinance (Thanks!) or asking me for advice when working with your current lender.
While there are many topics to discuss, and I will write on them in the forthcoming weeks, one topic that seems to be most relevant is “What is the rate” going to be.
The answer is that it depends on many, many things. We refer to these “things” as pricing adjustments. All mortgage loans today are subject to pricing adjustments. The adjustments HASP loans in particular are VERY confusing.
There are adjustments for Loan-to-Value, for Condo’s, for loan size. The big surprise, however, are the adjustments for the type of income documentation provided for the loan we want to refinance today. More specifically, if you did not provide any income documentation when you financed your original loan, then your HASP loan will be assessed additional fees!
For your information I’ve included a “Pricing Adjustment Matrix” below. I’m doing this more for effect than I am expecting you to use this as a tool. What I mean by this is that I want you to see all of the potential adjustments to which your loan could be subjected.
The bottom line is that you won’t know what your rate/fee will be until you have a lender price it out for you AND, you need to make darn sure that he/she knows what they are doing because what you don’t want to do is waste your time going through the refinance process only to be disappointed at the end.
It’s a good life!
Randall A Luebke RMA, RFC
Tom
I am so glad you found my blog useful. To address your questions, I cannot speak directly for CM Bank of course. However, I work for Bank of America and I can speak from our position. As for pricing, what I have seen that the rates are the same. However, there is an extra fee if your LTV is greater than 80%. The fee is typically 1/2 point. That said, with HASP you can borrow up to 105% of your home’s value and you will not need Private Mortgage Insurance. Today, lenders are rewarding borrowers for paying points. Therefore, if you can I would pay 1 point and your rate would be more in the 4.75% range. In a little over 3 years you will have saved the difference and you will keep on saving 3/8% forever.