HARP when ther is also a HELOC

We want to attempt to refi under HARP, we have excellent credit, never been late and are current on our mortgage so I do not see a problem in doing this since the 125 % stipulation was removed. My concern is that we have a HELOC as well, I understand that we need the bank that has the HELOC to approval this also... Do we contact them or let the agency doing the HARP do that for us? Thanks for the help.

3 Answers

the HELOC should not affect you, just be clear with your Loan Officer upfront that you have the HELOC and terms of the payment and available credit etc... the 125% removal goes into affect 3/17

While the HELOC may not affect the loan approval, it will certainly have an affect on your title insurance as they will need to agree to remain in second lien position. The lender holding the HELOC will need to agree to subordinate its lien position to the refinanced first mortgage. If the holder is an entity other than the first mortgage holder, a subordination request will need to be submitted to them for approval--in most cases an upfront fee will need to be paid before they will review (average is about $175). Usually your lender or their title company will coordinate this process for you but there is no guarantee that they will agree to subordinate, which means your lender would not be able to get title insurance showing them in first lien position.

I am closing one right now....LTV is around 200%, CLTV is about 240% with their HELOC. Should not be a problem at all for you.