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Playing the HARP

Posted by:  Chip Poli
2013-06-25 17:28:16

As mortgage rates began their spiral in late 2010, borrowers from coast to coast and anywhere else mortgage loans were placed, refinanced their loans to take advantage of lower rates, reducing their payment and the amount of interest paid to their lender.

Yet some borrowers couldn�t take advantage of the lower rates. Why? Conventional loans need at least 10 percent in equity before a refinance can take place. Borrowers who saw their property values fall faster than their mortgage balance soon found they were �upside down� with their mortgage, owing more than the property was worth, leaving them on the sideline, watching as their happy neighbors lowered their monthly payment with a refinance.

HARP is also known in lending circles as the Making Home Affordable program and DU Refi Plus.

[note color="#f6de7e"]More info and tools to see if you qualify: HARP Loan Look-up Tools�[/note]

Yet, in 2009, the Federal Housing Finance Agency introduced the Home Affordable Refinance Program, or HARP. This program was introduced to help borrowers who were upside down with their mortgages, refinance into the lower rates which are available.

After a few miscues and minor adjustments were implemented, the HARP program really began to gain steam with the introduction of HARP 2.0 in March of last year and eliminated many of the barriers that kept so many borrowers from refinancing with the initial HARP program.


What are the qualifications for the HARP loan?

  • Your loan must currently be owned by Fannie Mae and Freddie Mac
  • Your current loan must have funded before June 1, 2009
  • You can�t have previously refinanced your existing mortgage with a HARP loan

The HARP program is like any other refinance program with the primary exception being there are no loan-to-value limits. To qualify for the HARP refinance, you must also:

  • Be current on your existing mortgage with no more than one payment more than 30 days past the due date in the previous 12 months and no such payments during the previous six months.
  • You will provide evidence that you can afford the new monthly payment
  • Your loan amount cannot exceed the conforming loan limits for your area

Do You Qualify?

The very first consideration is finding out if your loan is owned by Fannie Mae or Freddie Mac, if it�s not, then your loan isn�t eligible for the HARP program. Whomever owns your mortgage is not necessarily who you send your monthly payments to. The entity that receives your monthly payments is the loan servicer and may or may not be the original bank where you obtained the initial mortgage.

To find out if your loan is owned by Fannie or Freddie, lot onto their website and enter the required information to see if either has your loan or you can call the customer service number listed on your mortgage statement and ask. If so, you can take the next step.

Which Lender?

It�s not necessary to use the same lender when applying for a HARP loan. A HARP is indeed a fully documented, refinance loan and lenders compete for that business just as they do any other loan type. Make your phone calls and get the best rate and fee combination you can find.

Refinance with no equity

You can also ask your lender for any options available to help offset the closing costs associated with the HARP loan, as you will encounter typical loan charges such as title insurance, settlement fees and other loan costs.

This program is also eligible for rental properties as well. As long as the existing loan is a conventional mortgage owned by Fannie or Freddie, occupancy doesn�t matter.

When you find your lender, simply make the loan application and follow the lender�s direction as your loan moves from the approval process to your loan closing.

If you�ve held back from refinancing your loan because you think you�re underwater, applied for the original HARP loan and were turned down, or didn�t think the program worked for investment properties, it�s time to reconsider.

This special program ends December 31 of this year (2013).

Rates. Integrity. Service.


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