Refinancing With HARP Before Its Expiration

Many of Americans have what’s known as an “underwater” mortgage, which means they owe more on their mortgage than what their home is worth.

If that’s the situation you’re in, the Home Affordable Refinance Program (HARP) can help.

This program was created in March 2009 by the Federal Housing Finance Agency as a response to the collapse of the housing bubble and the subprime mortgage crisis that led to the Great Recession.  

At the time, economic conditions burdened many homeowners with underwater mortgages. It was difficult to refinance, because property values were plummeting. Banks generally require homeowners to have a loan-to-value (LTV) ratio of less than 80% to refinance a mortgage without getting private mortgage insurance.

With HARP, homeowners with an underwater mortgage can refinance their mortgage to today’s lower rates without getting private mortgage insurance or paying any down principal.

HARP used to be limited to those with a LTV ratio of 125% or less (and, before that, 105% or less), but now, there is no maximum LTV limit.

Another benefit of HARP is that, usually, no appraisals or underwriting is necessary, which makes the refinancing process much faster and easier.

Don’t get HARP confused with HAMP (Home Affordable Modification Program), which was another program created around the same time for a similar purpose (helping homeowners who were affected by the housing bubble burst/mortgage crisis). HAMP allows homeowners to make alterations to their current mortgage, while HARP involves a complete refinance.

To qualify for HARP, homeowners must meet all of the following requirements:

  • Your mortgage is owned by Fannie Mae or Freddie Mac (neither of these organizations deal directly with homeowners, so one of them might own your mortgage without you even knowing it. You can call 1- 800-7FANNIE for Fannie Mae and 1-800-FREDDIE for Freddie Mac to find out)
  • The property you’re refinancing is either your primary residence, a one-unit secondary home, or a one to four-unit investment property
  • You haven’t been late on any of your mortgage payments in the past six months, nor have you been late on any of your mortgage payments in the past year
  • Your LTV ratio is greater than 80%
  • Your loan originated before June 1, 2009 (you can look this up using this tool for Fannie Mae and this tool for Freddie Mac)

HARP expires in December 2016, so if you’re interested in this program, you better act fast.

Have any questions about HARP or need assistance utilizing this useful program before it expires? Contact the Law Offices of Ray Garcia today and let us guide you to a more affordable mortgage.