Since the market crash in 2007, many homeowners have been struggling to keep up with their mortgage payments. After watching their homes plummet in value hundreds of thousands of dollars, their homes have become their money prison. House prices still haven’t reached the value that they were at in 2008, and many have homes that are underwater. To remedy this, Obama implemented the HARP Refinance program. What is HARP Refinance? That’s what we’re here to answer today.
What is HARP Refinance?
HARP stands for Home Affordable Refinance Program. It’s a government program designed to help those with little-to-no equity in their home refinance. The appeal of refinancing is receiving a lower interest rate to allow for a more manageable monthly payment.
There are stipulations and conditions for applying for HARP. These conditions include:
Good Payment History
You must be current on your mortgage payment. You also must have no late payments in the last 6 months. Additionally, you must have not been later than 30 days late on more than one mortgage payment 6-12 months prior to applying to the program.
You Have Limited Equity
The amount you owe on your first mortgage must at least be equal to the value of the home. Your loan-to-value ratio also must be greater than 80% for you to be considered.
Your Home Value Has Decreased
It doesn’t matter how many times your home value has decreased, what matters is that it has.
Your Loan is Eligible
Your loan must be owned or Guaranteed By Fannie Mae or Freddie Mac. Loans owned or guaranteed only through Fannie Mae or Freddie Mac are eligible. You can go to the Loan Lookup Tool to find out if your home is eligible.
Your Loan Must Have Been Closed On or Before May 31, 2009. To find out if your loan falls within this deadline, use the Loan Lookup Tool
HARP is only available for your primary residence, your 1-unit second home, or a one to four unit investment property.
There are quite a bit of guidelines. It’s worth checking into, though if you haven’t found another lender willing to refinance with you. Make sure you talk to a real estate expert to help you through the process.
What happens if you’ve applied for HARP before and got turned down?
Your best bet is to reapply. Although HARP began in 2009, recent guidelines have made it even easier for you to get accepted. Since 2011, there are exceptions that mean certain homes don’t need an appraisal. Some fees associated with borrowers opting to pay their mortgage off faster were eliminated. In 2013, they changed the date of eligibility from the date on the loan acquisition to the date on the note. This opened up the door for more homebuyers to be eligible.
So, if you’re struggling with your monthly mortgage payment and haven’t found a lender willing to refinance for you, HARP might just be the ticket. Make sure you check out your eligibility before you apply and talk to a lending professional.