Home Affordable Refinance Program HARP

History Of The Home Affordable Refinance Program

Home Affordable Refinance Program (HARP) is a government program designed to help homeowners in financial distress. If you have not heard of the HARP program before you’ll want to pay especially close attention. The HARP loans are unique being that they were created specifically to help people who had a property value lower than the balance of their mortgage. Financial troubles for many homeowners began when the housing market collapsed; leaving many to pay on a loan that was higher than the value of the house. Negative equity means that the loan on the home is for more than the present value of the home. It’s estimated that hundreds of thousands if not millions of Americans were left in a position of negative equity after the housing market collapse. Until the HARP program, if you were unfortunate enough to be in this financial position, there were virtually no lenders willing to refinance your loan.

You should now feel like you have a good concept of what HARP loans are, and why the program was created. If you’re looking for a more in depth resource you can find virtually every topic regarding HARP loans covered on our website.

There are many other benefits to the HARP program. One of the main goals of a HARP loan is to help you generate equity in your home quickly. By offering loan terms shorter than 30 years, the HARP program is able to deliver on the creation of equity for these distressed borrowers. Most borrowers simply cannot afford the monthly mortgage payment on a 15 year loan compared to a longer term. If you had a 20 year loan, the amount of interest you would be paying would be significantly lower, however. Shorter term loans are possible through HARP because of their extremely low interest rates. This way, you get the benefit of having a low interest rate and paying off your home faster.

Now that you understand a little bit more about the benefits of the HARP program and what it could do for you and your family, it’s important to know about the qualifications. Eligibility for HARP is exclusive to those who have not previously refinanced under the HARP program. Only those that have either a Freddy Mac or Fannie Mae loan will qualify for the program. To find out if your loan qualifies, contact your lender and ask them if your loan meets the criteria.

Eligibility for HARP loans is also restricted to only borrowers whose loan is 80% or more of the property value. Loan-to-value is an industry term that refers to the loan amount you need in comparison to the value of the property. The new guidelines of HARP 2.0 have lifted the cap of negative equity. One more point of eligibility for HARP loans is that borrowers must be current on their mortgage payment, with no late pays in the last 12 months. Contact your lender to find out about other requirements and eligibility restrictions for the HARP program.

If you or someone you know might be interest in the HARP program, call us today to get paired with a lender that will best work for you. We work with the top lenders in the industry and can provide you the information that you’re looking for. Now that you’ve reviewed the eligibility requirements you can streamline your loan process by gathering your documentation right away. The documents you need for a HARP loan are not much different than what you need for any other mortgage loan. Make sure you review your income documentation to ensure there are no errors and that all the information is as recent as possible. For most people, income documentation means the last two years of tax returns.

Some borrowers will need to make sure they have recent asset documentation in addition to their income documentation. In addition to saving you time, getting your documentation together early can help by alerting you should you need to request missing documents. Aside from the income and asset documentation, mortgage loans will usually require an initial application, home inspection, and then to be underwritten when all the information and documentation has been gathered. These are all typical parts of the loan process.

Finding out if your home loan is a Fannie Mae/Freddy Mac is actually pretty easy. Some people would rather not have to call and spend time on hold with their lender, and for those of you there is the following website where you can find out: http://fanniemae.comfanniemae.com/loanlookup/ and enter the information in the form. Remember, in order to be eligible for the HARP program your loan must be a Fannie Mae or Freddy Mac loan.

For clarification, all homeowners with either a Freddy Mac/Fannie Mae loan are not automatically then eligible for a HARP refinance, there are other criteria that must be met as well. See our instructions on how to find out if your loan is a Freddy Mac loan. Both Fannie Mae and Freddy Mac loans would qualify for the HARP program.

HARP loans are similar to conventional loans, yet understanding the differences could save you from wasting valuable time and effort. Our wide network of lenders nationwide can help you find the right one for you and your loan, don’t fall victim to believing that your lender is the only one that can do a HARP loan. If you have the time, talk to several lenders to make sure you’re getting the best deal possible on your HARP loan. Investing a little bit of time to ensure that you have the very best loan seems a wise decision.

Borrowers that have PMI (private mortgage insurance) on their current loan are not automatically excluded from eligibility for HARP loans. This is not true. HARP can and has refinanced borrowers that have had mortgage insurance.

While we wish it were true, the rumor about everyone being able to refinance into a HARP loan is obviously false. The truth is that if you meet the eligibility and pass the other criteria then you can refinance into a HARP loan. Only borrowers with a Freddy Mac/Fannie Mae loan, no mortgage late payments in the last 12 months, those with an LTV of 80% or more and those that the loan shows a financial benefit for can refinance under the HARP program.

Ordering your appraisal before instructed to by your lender could cause problems, so it’s best to wait until you’re told. There are many other criteria to be considered by the lender before ordering the home inspection so make sure you speak with your lender before you order your appraisal.

We suggest taking advantage of our extensive collection of information and learn as much as possible about the HARP program. There are many free resources online that can give you information about the HARP program. Most lenders are educated about the HARP loan process, so if speaking to someone is a better way for you to learn you should contact your current lender with your questions.

The goal of the HARP Mortgage Program is to provide opportunities for homeowners that are completely under water on their mortgage to refinance at today’s low rates despite negative equity. Most of those that learn about the HARP program are relieved to find a refinancing option and even more so when they learn all that the HARP program does for them. A HARP refinance helps rapidly build equity by offering borrowers a shorter loan term. Short loan terms mean that more of each payment get applied to the loan balance, creating equity in the home much faster.

One of the great aspects of the HARP program is that it doesn’t only help individual homeowners, but in doing so provides a great help to the entire housing market. In addition to helping borrowers that are in a position of negative equity, HARP loans are also available to non-owner occupied and second homes. Granted, these other property types have different qualifying criteria, such as a lowered loan to value limit required for eligibility.

The face that HARP allows for the refinancing of second homes and non-owner occupied properties actually helps the entire housing market. Industry experts state that property types other than the primary residence are more likely to be abandoned. From a homeowner psychology standpoint, there is no questioning this mentality. Most families are willing to fight more for their primary home than they would for a vacation or rental property. Although there is some evidence of lenders working on loan modifications for second home and investment property loans it does not seem to be as common as with homeowners living in their primary residences and experiencing financial hardships. Homeowners requesting to refinance either their second home or non-owner occupied property will still have to qualify the same as other applicants. This makes the acceptance of non-owner occupied and second homes by the HARP Mortgage Program significant because they will be able to take advantage of lower rates and a reduction in monthly outflow. By refinancing these types of properties, this might actually help not only people who rent in these properties but also the investors who have been actually lending. The collapse of the housing market left millions of homeowners in a position of negative equity, regardless of what kind of property type it was. The entire housing market would benefit from less property owners walking away from their underwater mortgage, so hopefully having this option helps non-owner and second home loan holders. When a borrower walks away there are substantial costs to the lender or bank associated with that loan. It’s easy to understand why someone that is in a position of negative equity would want to walk away, but doing so actually helps contribute to low or even lower property values. This is a good thing for investors and second home owners who need the payment relief and mortgage stability.

Fannie Mae and Freddy Mac guidelines are similar to those of the HARP loans in regards to property type eligibility. Some of those would be the standard detached single family residence, townhomes and condos, PUDS and more. As a reminder the occupancies that are acceptable with the Home Affordable Refinance Program are owner occupied, second home/vacation home and investment properties. HARP Mortgages also cover 1-4 units that are non-owner occupied which is pretty amazing.

When you hear someone mention HARP 2.0, they’re simply talking about the expanded LTV guideliens. As news continues to spread about the HARP program, the risk of uninformed banks and lenders misguiding potential borrowers is growing; ensure that you have all the right information about HARP by checking multiple sources. Whatever the motivation is or whatever the reason there is for the lack of knowledge regarding the HARP Mortgage program, it is best for homeowners to align themselves with mortgage professionals that will handle their home and financing with the care it deserves. HARP loans have a pretty easy set of qualifying criteria, so we’ve captured some of the main disqualifying points and put them together for you to read here. This is just a list of some, and by no means should reflect all the possible disqualifications for a HARP loan.

• Homeowners that do not currently have a Fannie Mae or Freddie Mac Loan are not eligible for the HARP Mortgage. Call your current lender to find out if your loan is a Fannie Mae/Freddie Mac loan. HARP only accepts loans that were originated before May 31, 2009.
• If you have already refinanced into a HARP loan you will not be eligible to refinance again, even under a HARP 2.0 loan.
• Eligible borrowers must be current on their mortgage payments, with no more than one 30-day late payment in the last 12 months.
• If you presently have a VA, USDA, or FHA loan then you are NOT eligible for a HARP refinance.
• Homeowners that are in foreclosure are not eligible for a HARP Mortgage. Once the foreclosure process has started there isn’t anything that this program can do to help.
• The result of the loan must be one of the following or it will not qualify:

The total debt ratio has to stay below 45% when the mortgage payments increase by 20% or more.Many borrowers that are upside down on their loans think that there are absolutely no financial options for them. With the modifications to the HARP 2.0 program, homeowners looking to refinance into a fixed rate loan have no loan to value cap with a HARP refinance.

There are some property owners that were left owing twice what the house was worth, and HARP 2.0 can now help those people refinance out of those loans. Refinancing with the HARP program offers borrower’s a variety of loan programs to choose from, from different terms to even include adjustable rate loans. For borrowers looking to refinance into an adjustable rate mortgage under the HARP program, there is a maximum LTV of 105%. One of the eligibility requirements for all HARP loans is that the homeowner has at minimum an 80% loan to value.

Contrary to many myths, you do not have to use your same lender when refinancing under the HARP program. Do not believe anyone stating that you HAVE to use your present lender to get a HARP loan.

It’s not guaranteed, but many applying for a HARP loan have found that the appraisal gets waived. This is one of the benefits of the way the HARP loan process was setup. HARP was designed to help a very specific group of homeowners and the program works well to streamline the process.