Can HARP Help You Refinance?
The Home Affordable Refinance Program (HARP) is a government-funded mortgage program designed to assist borrowers who otherwise might not be able to benefit from refinancing. With interest rates still near historically low levels, and time ticking down to the 2018 HARP deadline, you need to figure out fast if this program is a good option for you.
What is a HARP Loan?
The federal government started HARP to combat the negative impact the 2008 credit crunch had on home values in America.
By 2009, millions of American homeowners suddenly found themselves with “negative equity” (sometimes referred to as having an “upside down” or “underwater” mortgage). Low interest rates should have provided these homeowners with an opportunity to refinance for a lower monthly payment and better financial security, but negative equity prevented them from qualifying.
HARP to the rescue.
For all of those underwater mortgage homeowners out there (and there still are many, despite the fact we’re a decade removed from the 2008 collapse), the Home Affordable Refinance Program remains the only path to refinancing.
HARP Loans Pros and Cons
The pros include:
- Even if your home has decreased in value since you purchase it, you can still qualify for refinancing
- Approval requires no on-site appraisals or appraisal costs
- If you have a good credit score, you can get a zero-cost refinance at the lowest current interest rates available
The biggest cons are:
- Strict requirements include: “no late mortgage payments in the last six months, and no more than one late payment in the 12 month period prior to applying”
- Some people with homes worth more than $1,000,000 find that HARP loan limits reduce the value of refinancing
- The program is slated to end in 2018, which forces borrowers to act soon rather than waiting for their own timeline
When Should I Act?
The Dec 31, 2018 deadline for HARP is in sight, and interest rates are rising. These two factors have people with underwater mortgages in a hurry to take advantage of HARP refinancing in 2018 before it’s too late.
If you’re interested in a HARP loan and you want to make sure you get the lowest rate from the best lender, Trusted House Finance has you covered.
Fill out the form to find out how much you can reduce your monthly mortgage payment with HARP refinancing:
Who qualifies for a HARP loan?
As with any mortgage, lenders are looking for borrowers with strong assets, consistent incomes, and good credit scores.
The exact requirements for HARP eligibility include:
- The mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac
- The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009
- Borrowers must be current on their mortgage payments with no payments more than 30 days late in the last six months and no more than one late payment in the last 12 months
- The current loan-to-value (LTV) ratio must be at least 80 percent. There is no maximum LTV limit for a new fixed-rate mortgage. The maximum LTV for a new adjustable-rate mortgage is 105 percent.
- You cannot have previously refinanced under HARP (unless it was a Fannie Mae loan refinanced under HARP between March and May 2009)
Is the HARP program still active?
HARP was originally supposed to be shut down on September 30, 2017. However, due to the popularity of the program, the ongoing low interest rates, and the millions of homeowners that still have underwater mortgages, the program was extended until December 31, 2018.
Is HARP refinancing really worth it?
Some homeowners worry that the closing costs associated with a HARP loan will significantly cut into the money saved by refinancing. The good news is that HARP closing costs do not need to be paid upfront. They can be folded into monthly payment over the course of the loan. For this and other reasons, HARP really is worth it for homeowners who can benefit from refinancing but are simply being held back by negative equity.
Don’t Miss Out!
You need to act fast to combine the advantages of HARP loans with the extremely low interest rates that we’re still seeing in America.
Trusted House Finance can help you figure out whether or not you’re right for a HARP loan.
Give us a few details about your home and current mortgage and we’ll help you find answers about HARP!
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