What is the HARP? HARP stands for Home Affordable Refinance Program. This federal government program was developed in 2009 to help homeowners in America refinance their mortgages. This special refinancing program is designed to save homeowners, including those who are “underwater” or “upside down” because they owe more on a loan than the present value of the home.
What is a HARP Mortgage Loan?
What is a HARP mortgage loan? Read here to fully understand if you could benefit from a HARP mortgage loan.
With interest rates at an all-time low, many people could benefit by refinancing their mortgage. Unfortunately, due to tightened lending restriction, many people no longer qualify for a refinance through a traditional mortgage lender.
The HARP Mortgage Program is well worth your attention and effort to see if you can lower your mortgage payments, your interest rate and ultimately save you thousands of dollars over the term of your loan.
Once you have determined that your current mortgage is backed by Fannie Mae or Freddie Mac then you should make every effort to contact lenders (including your current lender) to see if you qualify for the HARP Mortgage Program.
This is especially true if you were turned down for a HARP Mortgage Program refinance due to your home not appraising high enough to meet the LTV requirements. Remember the new HARP Mortgage Program guidelines do not have an LTV limit as long as you refinance to a fixed rate loan!
HARP Loan Program Requirements
In order to participate in HARP, you need to meet the following requirements: –
- Your home mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac.
- You must be current on your mortgage, and cannot have made a payment more than 30 days late in the past year.
- You must have negative home equity (you owe more on your mortgage than your home is worth), and under the new guidelines your mortgage can now exceed 125% of the value of your home.
- Refinancing must help the affordability or stability of your mortgage.
- You must have the ability to continue making payments
- Mortgages owned or guaranteed by the FHA, VA, or USDA are not eligible for HARP.
- Your property must be 1-4 units.
- Your property must also be your primary residence. At this time, 2nd homes are not eligible for refinancing under HARP.
HARP Mortgage Program basic requirements remain the same and include: –
- Owner must live in home being refinanced.
- Current loan must be owned by Fannie Mae or Freddie Mac.
- Current mortgage must be up to date and no late pays for prior 12 mos.
- The new loan must be better in terms of payments and stability for owner.
HARP Mortgage Program Alternatives
HARP Mortgage Program alternatives if you are Delinquent on Your Current Mortgage: If you are behind or delinquent on your home mortgage you can still apply for assistance with the HAMP (Home Affordable Modification Program).
The big difference available to you under the HAMP program is that your loan is not refinanced but modified. In addition, the HAMP program does not require your loan to currently be with Fannie Mae or Freddie Mac.
HARP Eligibility 2021
For these people, getting a HARP mortgage refinance could be a great option to refinance and take advantage of the low interest rates. There are several requirements that need to be met in order to qualify for a HARP mortgage refinance.
- Required LTV
The first requirement to qualify for a HARP mortgage refinance loan is to meet the specified LTV requirements. Due to tightened lending restriction, many mortgage lenders refuse to approve mortgage refinances unless the loan to value is less than 90%.
Due to falling housing prices, many people who could benefit from a refinance, no longer have adequate equity in their home. The HARP program raises the required LTV up to 125% or less.
- Must be Current on Mortgage
The second requirement to qualify for a HARP mortgage refinance loan is that they borrower must be current on their mortgage.
While the HARP program is designed to help people refinance their mortgage, it will not be willing to accept responsibility for an individual who has a history of missing mortgage payments.
In most situations, the borrower must have made their mortgage on time for at least 12 consecutive months to qualify for a HARP loan.
- Owned by Freddie or Fannie
The third requirement to qualify for a HARP mortgage loan refinance is that the loan must be owned by either Freddie Mac or Fannie Mae.
The HARP a program was partially designed to prevent homeowners from defaulting on loans owned by the two mortgage giants. Because of this, only loans owned by those companies qualify for a HARP refinance.
Where Can I Get HARP Mortgage Loans Rates?
- By Ann White
HARP is the acronym for the Home Affordable Refinance Program. The best place to get rates for HARP Mortgage Loans is by speaking with a mortgage broker.
HARP stands for Home Affordable Refinance Program. The rates are going to be roughly 0.1% higher than traditional fixed rates.
This is because there is higher risk for the lender as the program is for people with homes whose value have dropped thus making their home “under water” in relation to what the owe versus what their home is worth. The program is for people who owe more than their home is worth.
To get mortgage rates for HARP Mortgage Loans your best bet is to first call your lender. Tell them your home might be underwater and ask what the rates would be for HARP Mortgage Loans.
- Find Someone Knowledgeable
Many loan originators are focused on the products not the government labels from them. Some loan originators won’t know what to say if you ask what are mortgage rates for HARP Mortgage Loans?
They will be able to tell you their rates for Freddie Mac DO refi plus (also known as the relief refinance mortgage). They will also be able to tell you the rates for Fannie Mae’s DU refi plus program. These are both HARP programs.
- Other Resources
If you don’t want to bother calling a lender and dealing with that nonsense, simply Google par fixed rates and add 0.1%. This is the fastest way to get mortgage rates for HARP Mortgage Loans.
Better yet, keep in mind you won’t know if you need a HARP loan until you have had an appraisal. Traditional financing allows you to borrow up to 97.75% of the appraised value of your home. HARP loans allow up to borrow 105% of the appraised value of the property.
Most HARP loans start out as a traditional loan until the appraisal comes back light. Ask lots of questions about these programs. They are specialty programs and you may not qualify.
What is HARP 2.0?
HARP, or HARP 1.0 was originally established in 2009 as a way for homeowners who owed more on their homes then what they were valued at to refinance their high interest mortgages at lower more affordable interest rates. The government’s expectation in creating the HARP 1.0 program was that it would help millions of homeowners.
However, due to several restrictions, the HARP program fell well short of its goal in helping these homeowners refinance their homes. As a result, the Obama Administration and the U.S. Government reworked the program to ease its many restrictions. The results of which are now referred to as HARP 2.0.
The HARP 2.0 bill has now been extended until December 31, 2013. With HARP 2.0 homeowners with a loan-to-value ratio of more than 125% can now qualify – something that prevented a large number of homeowners from qualifying for the original HARP program. HARP 2.0 now only requires that the property value only have to be valued at less than the mortgage in order for homeowners to qualify.
More Lenders, More Homeowners
The original HARP program required that a homeowner’s mortgage be serviced by one of only a small and select list of banks. These banks included: Bank of America, Citigroup, Ally Financial, Wells Fargo and JPMorgan Chase. The updated HARP 2.0 program has lifted this restriction and is now available to all mortgage servicers.
It’s important to note that while HARP 2.0 makes it far easier for underwater homeowners to qualify for this program there are still a number of the original HARP program rules and restrictions that have remained intact.
The most import of these restrictions is that this program is still only available to Fannie Mae and Freddie Mac mortgages. In addition, underwater homeowners must be current with their mortgage and have had no record of late mortgage payments in the last 12 months. Homeowners that apply for this refinancing program must be able to prove that they can afford the new payments on their home.
Overall, the changes to the HARP 2.0 program are a welcome change. These changes should provide the assistance to millions of underwater homeowners. If your mortgage is more than your current homes value, you may be able to lower your current mortgage interest to a more affordable interest rate. To receive interest rate quotes and to learn more about the HARP 2.0 program please complete our rate quote request form today.
Who is eligible for a HARP mortgage?
Borrowers who fulfill the following criteria will, in general, qualify for HARP: –
- They must be current on their mortgages and have no record of late payment within the last six months, and may only have had one late payment maximum over the past 12-month period.
- The current loan-to-value ratio (LTV) must be higher than 80%.
- The mortgage must have been sold to or guaranteed by Fannie Mae or Freddie Mac on or before May 31, 2009
- The mortgage must not have already been refinanced through HARP in the past, unless it happens to be a Fannie Mae loan that underwent a HARP refinance between March and May 2009.
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FAQs for HARP Mortgage Program
Q1. How has the HARP program changed recently?
The updated HARP program, commonly referred to as HARP 2.0 or “Obama Refinancing Plan” include the following notable changes:
No loan to value limits: Borrowers will now be able to refinance regardless of how far their homes have fallen in value. Previous loan-to-value limits were set at 125 percent.
Eliminating appraisals and more flexible underwriting: Most homeowners will not have to get an appraisal and many will not be required to have their loan underwritten, making their refinance process smoother and faster.
Modified fees: Certain risk-based fees for borrowers who refinance into shorter-term loans will either be eliminated or modified.
Extended deadline: The end date to take advantage of HARP refinancing has been extended.
Q2. How do I find out who holds my mortgage?
To be eligible for the HARP program, your mortgage must be held by either Fannie Mae or Freddie Mac. To “look up” your mortgage, check Fannie Mae. If you can’t find your mortgage there, check Freddie Mac.
Q3. Who is eligible for refinance under this enhanced program?
Borrowers who fulfill the following criteria will, in general, qualify for HARP:
They must be current on their mortgages and have no record of late payment within the last six months, and may only have had one late payment maximum over the past 12-month period.
The mortgage must have been sold to or guaranteed by Fannie Mae or Freddie Mac on or before May 31, 2009
The mortgage must not have already been refinanced through HARP in the past, unless it happens to be a Fannie Mae loan that underwent a HARP refinance between March and May 2009.
Q4. What are the interest rate and other terms of a refinance under HARP?
The rate will be based on market rates in effect at the time of refinancing and the homeowner will be charged all associated points and fees specified by your lender. Interest rates can vary depending on lenders and over time as market rates change. Refinanced loans should not have prepayment penalties or balloon payments.
Q5. I am delinquent on my mortgage. Will I qualify for a refinance under HARP?
No. Homeowners must have a current mortgage at the time of refinancing, with no overdue payments in the past six months and no more than one late payment in the past twelve months. Contact your service center to see if the Affordable Home Modifications Program is right for you.
Q6. How long will refinances under HARP be available?
The program expires on December 31, 2013. Your refinance under HARP must have a mortgage note date on or before this date.
Q7. I’m current on my mortgage. Will a refinance under the Home Affordable Refinance Program (HARP) help me?
Eligible homeowners, who are current on their mortgages but have been unable to take advantage of today’s lower interest rates because their homes have decreased in value, may now have the opportunity to refinance. Through a refinance under HARP, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they own or that they guaranteed in mortgage backed securities.
Q8. How do I know if I am eligible for a refinance under HARP?
You may be eligible if:
You are the owner-occupant of a one- to four-unit home.
The loan on your property is owned or guaranteed by Fannie Mae or Freddie Mac.
At the time you apply, you are current on your mortgage payments (“Current” generally means that you have not been more than 30 days late on your mortgage payment in the last 12 months; or, if you have had the loan for less than 12 months, you have never missed a payment).
The amount you owe on your first lien mortgage does not exceed 125% of the current market value of your property.
You have a reasonable ability to pay the new mortgage payments.
The refinance improves the long-term affordability or stability of your loan.
Q9. Will I need mortgage insurance on a HARP refinance?
If your existing loan has private mortgage insurance, you will need the same amount of insurance coverage for a refinance under HARP. If your existing loan does not have private mortgage insurance, it will not be required as part of a refinance under HARP.
Q10. How do I know if my loan is owned or has been guaranteed by Fannie Mae or Freddie Mac?
Ask your mortgage lender or servicer. Also, both Fannie Mae and Freddie Mac have established toll-free telephone numbers and web submission processes to make this data available. Homeowners can enter information to determine if either agency owns or guaranteed the loan. This information is not a guarantee of eligibility for a refinance under HARP, as other qualifying criteria must also be met.
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