When you have little equity in your home, or owe as much or more on your mortgage than your home is worth, it can be difficult to find a lender willing to help you refinance.
But for borrowers who have remained current on their mortgages, and have loans owned by Fannie Mae or Freddie Mac, there is hope. It’s called HARP.
Introduced in March 2009, HARP enables borrowers with little or no equity to refinance into more affordable mortgages without new or additional mortgage insurance. HARP targets borrowers with loan-to-value (LTV) ratios equal to or greater than 80 percent and who have limited delinquencies over the 12 months prior to refinancing.
Significant changes have been made to HARP since the program was first introduced. For example, in 2011 the LTV ceiling was removed, property appraisal requirements were waived in certain circumstances, certain risk fees for borrowers selecting shorter amortization terms were eliminated, and certain representations and warranties were waived.
In 2013, the eligibility date was changed from the date the loan was acquired by Fannie Mae or Freddie Mac to the date on the note, increasing the pool of eligible borrowers.
Through HARP, you can get a lower interest rate (which means less out-of-pocket costs each month), get a shorter loan term, or change from an adjustable to a fixed-rate mortgage. There’s no minimum credit score needed, either. And now that HARP guidelines are simpler, even people who were formerly turned down may now be eligible for HARP refinancing.
It's hard to believe that many homeowners don't know the Home Affordable Refinance Program® (HARP) actually exists, millions of Americans could reduce their monthly payments by as much as $3,500 a year. This program isn't talked about often.
The reality is most people think the savings are too good to be true. Even worse, some think the program is only for homeowners with bad credit or foreclosures. This couldn't be farther from the truth. HARP was made for the average American and good credit helps you qualify for even better rates!
The government is making a final push and urging homeowners to take advantage of HARP before the program ends. If lowering your payments and shaving years off your mortgage would help you, it's vital that you take action now.HARP
FHFA Home Affordable Refinance Program site -- helping homeowners who've seen drop in home values refinance with better mortgage terms.
HARP: 'Not A Scam' Homeowners may be getting a big pay day.
Don't be surprised that you may even take some cash out of your home to help you with bills, renovations, your child's education, a vacation, or to start saving for retirement.
HARP may be your best route to a better mortgage.
Frequently Asked Questions
The Home Affordable Refinance Program ends December 31, 2018
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