HARP 2.0 LOANS: .75 Higher Interest Rate Penalty for More Than 125% LTV

Why was my rate locked in at 3.875% for a 15 year mortgage when rates are around 3.00%?

Unfortunately if your house is more than 125% LTV you have to pay a premium on your mortgage rate with the Harp 2.0 program due to the higher risk involved in refinancing such an underwater home. I don't mind because 3.875% still beats 6.500% any day.

Hopefully if my condo does come in at 124% LTV during the appraisal my mortgage rate will drop even lower at closing. I highly doubt my appraisal will be that favorable but we will see what happens.