HARP 101: Refinancing Your Mortgage

Mortgage Loan AgreementHome Affordable Refinance Program, or more commonly known as HARP, is a unique refinance program first introduced in 2009 by the Federal Housing Finance Agency (FHFA) and the Department of the Treasury.

Its design is to help homeowners with little to no equity in their homes, but are current on their mortgage payments, to refinance their mortgage at a lower interest rate. There have been changes to HARP over the years that will now allow more to qualify, and this program extends until September 30, 2017.

Benefits of HARP

HARP can lower your monthly mortgage payment by reducing your interest rate, and you get a mortgage rate that is fixed and will not change even years later. This enables you to build equity much quicker. And, more on the plus side, there is usually no appraisal needed, so you get to save money and time.

Are you eligible for a HARP loan program?

To qualify for HARP loan program – a service offered by firms such as Primary Residential Mortgage, Inc. – you need to meet the following requirements:

  • You must have no late mortgage payments in the last six months and not more than one late payment in the past 12 months.
  • The property you wish to refinance is your primary residence, second home, or a rental property whose value has decreased significantly.
  • To be eligible, your current loan-to-value ratio must be greater than 80%.
  • The mortgage is owned or guaranteed by Fannie Mae or Freddie Mac and has been closed on or before May 31, 2009.
  • This is the first time you will refinance under HARP.

So what is next after qualifying?

After qualifying, you need to go through an application, approval, and closing process that are similar to how you got your original mortgage. You will need to prepare your basic financial and loan information before calling your mortgage company. Do make sure that they are an approved HARP lender, though.

If you think that you may have a hard time paying your mortgage or want to refinance, you should contact your mortgage company as soon as possible so that they could check your eligibility.

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