We maintain editorial independence to ensure that the recommendations and insights we provide are objective and unbiased. Please note that the HARP 2. We recommend you review our summary of Refinance Assistance Programs for other mortgage refinance options.
The HARP 2. If your mortgage is underwater, meaning your mortgage balance is greater than the value of your home, it can be virtually impossible to refinance without using a refinance assistance program. The program is designed to make it easier for borrowers who are current on their mortgage to refinance into a more affordable loan with a lower monthly payment. HARP 2. The main difference between a HARP 2. This also means that borrowers may not be required to obtain a property appraisal which enables more borrowers to refinance and saves them significant money and time.
Additionally, HARP 2. The program's reduced borrower qualification requirements make it ideal for homeowners who cannot refinance using standard mortgage programs.
The first step with the HARP 2. There are many HARP 2. We review program and borrower qualification requirements in detail below. Borrowers who are eligible for the HARP 2. These approved lenders make sure that your loan is eligible and that applicants meet program guidelines and qualify for the program. Even if your current lender offers the HARP 2. The table below shows interest rates and closing costs for refinance lenders in your area.
We recommend that you contact multiple lenders to determine if they offer HARP 2. Compare the loan terms and requirements for HARP 2. Comparing lenders and proposals enables you to find the refinance program that is right for you. Unfortunately, there's still a lot of confusion about the changes and how they could benefit homeowners who haven't been able to refinance their mortgages.
So here's a summary of some of the main elements of the program and key changes under HARP 2. It's designed for homeowners who are current on their mortgage payments but haven't been able to refinance to a lower interest rate because they owe too much on their mortgage.
In many cases, they are said to be underwater on their mortgage - owe more than the property is worth. First of all, you have to have a mortgage backed by Fannie Mae or Freddie Mac. There's a pretty good chance you do, unless you have an FHA or VA loan, or your home was costly enough to require a jumbo mortgage - before the crash, Fannie and Freddie guaranteed the great majority of middle-class mortgages in this country.
Both Fannie Mae and Freddie Mac offer easy tools on their web sites to find out if they hold your mortgage. You also have to be current on your mortgage payments - no more than one late payment over the past year and none in the last six months.
Your mortgage must have been acquired by Fannie or Freddie prior to May 31, and must not have been previously refinanced through HARP standard refinances are ok.
HARP is not strictly limited to underwater mortgages. In fact, many of the home loans refinanced under HARP have been mortgages where borrowers had some equity, but not enough to qualify for a conventional refinance. HARP refinances are allowed on mortgages with a greater than 80 percent loan-to-value ratio - i. Perhaps the biggest change in HARP 2. Previously, there was a percent loan-to-value limit on mortgages refinanced through HARP - that is, the balance owed on your mortgage could be no more than 25 percent greater than the value of your home.
Under the new rules, it doesn't matter how much your home has fallen in value, you can still qualify to refinance your mortgage. The new rules for the program allow lenders to use automated systems to produce an estimated value for your home, rather than requiring an actual appraisal.
This offers several benefits for you, the borrower. First, an automated appraisal means you don't have to pay for having an actual appraisal performed, which can save you several hundred dollars.
It's also faster. It also makes it easier to qualify, since with the loan-to-value cap lifted, they're not worried about getting a precise estimate of your home value.
A lender may still require an actual appraisal in some situations, however. Others traded in mortgages with variable interest rates for fixed-rate mortgages, making managing monthly payments less challenging. After the housing bubble burst, many homeowners saw their home prices drop dramatically. As a result, many Americans found themselves with mortgage loan balances that exceeded the value of their homes.
Despite the controversy surrounding the program, HARP played an integral role in the economic recovery process by strengthening the housing market. The government made multiple changes to HARP over the years. Unlike HARP 1. So under HARP 2. Your email address will not be published. Here are the requirements set forth; Verify your mortgage is held by either Fannie or Freddie. Determine if your mortgage is old enough: Only those whose mortgages were securitized prior to June 1, can apply for HARP.
In general, this means that your mortgage must have started in mid-May or earlier. If you no longer have your paper work to look the date up call the title company that assisted you in the closing and they can supply you with the start date of your loan. Keep in mind if your loan changed hands the start date may not have actually been the closing date and could have been a month or two later.
You must be current! Besides that make sure you have all of the typical documents ready for review: bank statements, drivers license, homeowners insurance deck page, pay stubs and W-2s.
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