Do they verify income for HARP refinance?

Posted on Oct 2, 2012 in HARP Refinance

Question by David: Do they verify income for HARP refinance?
Under the new HARP rules, erectile ambulance I qualify and have been current on my mortgage. But my income is typically lower than what most banks would typically qualify for a mortgage. In other words a high debt-to-income ratio.

Best answer:

Answer by Darren
Generally no. A bank may ask for that information in an application but your ability to repay is judged based on the payment history, If you have been on time in the last 12 months, Fannie Mae and Freddy Mac consider you able to repay.

The exception is if your monthly payment were to increase by 20% then you would need a 45% or less debt to income ratio.

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  1. Yes, of course they will verify your income(s). No lender is going to engage in a refinance without validation of how much money you make. If your DTI is too high, you will not be able to refinance.

  2. The HARP 2.0 program differentiates between loans offered through the manual underwriting system and the automated underwriting system.

    In general, no DTI requirement exists for loans done by the original lender/servicer through the manual system. (Fannie Mae’s Refi Plus loan, or Freddie Mac’s Relief Refinance Loan). The exception to this rule is if your new payment increases by more than 20%, then a DTI ratio of no more than 45% is required.

    Any other type of HARP aside from a manually underwritten original lender/servicer loan HAS a DTI ratio requirement that generally is no more than 45%. However, lenders can have stricter underwriting guidelines than the general HARP guidelines. In all cases, even if there is no DTI requirement, the lender must verify income.

  3. They will verify your income but since your DTI is not a deterrent to being approved it will serve you well. No lates in last 12 months and the proposed payment will be lower is win-win for you and the bank.

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