What is this government refinance program and what are the conditions?
Many homeowners try to refinance their (underwater) mortgage but are not succeeding for many reasons. Whether you watch the financial news on CNBC or Bloomberg TV, or listen to the local radio news, I’m sure you’ve heard about the existence of government programs to refinance mortgage, aimed at helping home owners who cannot take advantage of the lowest mortgage refinance rates. This because they don’t qualify to refinance their mortgage.
This “Harp loan program” is a fantastic opportunity for property owners with mortgages owned by either Fannie Mae or Freddie Mac.
What is an underwater mortgage?
Maybe you did not get a refinance with a traditional refinance bank, because the value of your home has declined? Or maybe you owe more than the market price of your house? That means your home loan is underwater.
Being underwater on your mortgage is a painful situation that prevents the homeowner from selling the home unless he has enough cash to pay the loss out of his own pocket. Thus, if the property homeowner (the borrower) wants to sell the home because he can’t afford the monthly mortgage payments anymore, the home will fall into foreclosure unless the mortgagor is able to renegotiate the loan.
Then the Home Affordable Refinance Program (HARP) may help you to refinance your mortgage at cheap rates. Read this information and check out your options!
What is the New HARP Program 2014?
H.A.R.P 2.0 is a new housing program especially developed for home owners whose houses have lost value in the last few years and didn’t manage to get a normal mortgage refinance. Under other circumstances, home refinance companies or banks will demand that the equity or value of your property is higher than the mortgage balance before they want to approve any application for a government mortgage refinance program to refinance debt.
But if your house value had gone down during the financial crisis, that is not possible. Thus, the Obama government refinance program was designed for home owners facing this quandary. This way the Harp refinance program offers more options to get a cheap refinance quote or even a 2nd mortgage refinance at no extra costs.
When do you Qualify for the HARP Program?
In order to qualify for the HARP loan refinance program, your mortgage must either be owned or guaranteed by Fannie Mae or Freddie Mac.
The Harp Loan Requirements in 2014:
Additionally for eligibility for a harp 2..0 loan, you must meet the following criteria:
- You don’t have an VA, FHA, or USDA loan
- Last year, you were never more than 30 days late for your mortgage payment.
- You are current on your mortgage payments
- Your mortgage is for a larger amount than the value of your home right now.
- The outstanding amount of your loan is not greater than 125% of the current value of your house.
- You can prove that you are able to pay for the new payments for your mortgage refinance.
Modification of Mortgage at no cost?
Note that if you do qualify for a refinance under the HARP Program (a so called Harp Refi), you still need to submit a loan application. Further, you have to pay a refinance fee, just as if you were obtaining a refinance through other (commercial) channels. The Harp loan will be underwritten to see if you are qualified to obtain a loan in general. Just because you meet the criteria listed above, there is no guarantee you will be refinanced under the H.A.R.P Program if you do not qualify for the refinance requirements in the first place. A mortgage modification sometimes doesn’t come easy as you probably know by now..
Some of the great features of this Obama refinance program:
Not only you can get lower closing costs but there are more benefits:
- Generally more lenient underwriting
- Sometimes no appraisal is required
- You can get the same low mortgage rates rates that conventional loans qualifying for. (This includes adjustments for credit score, type of property, etc.)
- If Freddie Mac owns your home mortgage, you may not be required to prove your income. NOTE: If your loan is owned by Freddie, you will have to do your refinance through your current loan servicer.
- No mortgage insurance needed (even if you owe more money than your property is worth)
- With a Fannie loan, you can include all your closing costs in the mortgage, except for a credit report fee and an appraisal fee (if required)
- a HARP Loan does not require cash upfront.
The HARP loan refinance program is available until December 31, 2015. (Chances are it will be extended again).
This site offers a lot of tips and resources you can use to get a low interest home loan refinance or how to take advantage of cheaper mortgage rates online. This makes it sometimes possible to get home loans for people with poor credit.
If you are not eligible for this program, there are still other possibilities to avoid foresclosure
Read this article to learn about upside down mortgage solutions and for more information on how to prequalify for a home mortgage.
This video summarizes it very good:
Harp 3.0 at low refi rates
Is there a harp 3.0 refinance program too?
This is to be released soon, according to the digital journal :
“Democrats, led by Senate majority Leader Harry Reid, voted to overturn an existing rule that required a minimum of 60 votes to break a filibuster blocking a floor vote for a presidential nomination. This would allow Mel Watt, President Obama’s nominee for the position of Director of the Federal Housing Finance Agency, to win the position by a simple majority. Secure One Capital, a direct mortgage lender, expects Watt to cooperate with the Obama Administration’s homeowner relief programs, including refinance with harp 3.
Will this changed government loan program pass? Secure One Capital predicts that the FHFA will pass HARP 3.0 on its own, without the approval of Congress. .. http://www.digitaljournal.com/pr/1633761