Few things the government does can be called a real success story, but the HARP Refinance program is one of them.
If you’re not familiar with the Home Affordable Refinance Program, also known as HARP, it’ is a program for good homeowners, that through no fault of their own, lost value on their home and therefore typically could not refinance.
Generally speaking, it serves two situations. First is that your current loan was done NOT needing mortgage insurance. Having lost value, now for example you owe 95% of the (lost) value, and could only get a new loan by adding expensive mortgage insuance to the new loan.
The second is that you bought the house, you put at least 5% down payment. So today, if you now owe more than the home is worth, you normally would NOT be able to refinance at all.
HARP, which started back in 2009, fixes both of those situations. If your existing loan does NOT have mortgage insurance, regardless of the current loan-to-value, your new loan would NOT need mortgage insurance. If your house is underwater... regardless of how far underwater, you can also refinance.
BASIC HARP Refinance REQUIREMENTS
Who is eligible for HARP? You may be eligible if:
- The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.Who you make payments to can be different than the underlaying owner of the loan.
- The mortgage must have closed on or before May 31, 2009.
- The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
- The current loan-to-value (LTV) ratio must be greater than 80%.
- The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.
While there are requirements you have to meet to qualify, many have misconceptions about HARP that are misguided or completely false. Don't assume you can't qualify, or that you will be denied. Contact an experienced local mortgage broker for a quick no obligation review.
- Lower your monthly payments
- Closing costs are the same as any other mortgage loan
- Closing costs can be rolled into the loan
- Refinance into a shorter loan term (20-yr, 15-yr, etc)
LOAN NOT FANNIE MAE OR FREDDIE MAC
If you have a conventional loan, most likely it is owned by Fannie Mae or Freddie Mac. But if you have a different loan. Maybe an FHA Loan, and VA Loan, or even a USDA rural housing loan - you can still refinance if your home has loat value. Those loans all have seperate programs, known as a streamline refinance. These programs offer reduced documentation, but the biggest benefit is there may be no appraisal required, allowing lost value or underwater homes to easily be refinance to today's interest rates.
In MN or WI, visit www.HARP-Refinance-MN.com for more information and assistance on the HARP 2.0 government refinance program.