HARP Loan Refinance Program
HARP loan refinance program is a refinance program available to borrower’s whose mortgages are owned by Fannie Mae or Freddie Mac. The HARP program was initially introduced in 2010 but because the program guidelines limit the loan to value ratio to 125% there was limited participation.
Why not make the HARP Refinance EASY?
The housing problem we have experienced over the past several years has offered almost no reward to those homeowners who pay their mortgage as agreed. Finally, these homeowners who have a reward in the recently expanded HARP loan refinance program (a.k.a. HARP 2.0). In late 2011 the agencies responsible for the HARP loan refinance program realized the program was not helping enough people. As a result, HARP 2.0 was announce and was generally implemented in the mortgage market place in March 2012.
The HARP loan refinance program was changed in the following ways:
• Participating lenders are not as liable for the performance of the loans and the associated risk. This helps the mortgage market place more actively participate.
• Often no appraisal is required. Where one is required the HARP loan refinance program does not set a limit on the loan to value. Some lenders have introduced their own guidelines that apply a limit.
• Risk based pricing caps helping to keep the interest rate offered borrowers lower than before. Lenders typically raise rates to compensate for risk. In the case of the HARP loan refinance program the increase in rate is capped so the rate stays reasonably low.
Borrowers certainly feel discouraged when they see they owe more on their home than it is valued at today. The message we have for homeowners today is that through the HARP loan refinance program borrower’s can reduce the cost of the loan significantly by lowering their interest rate and by applying the interest savings as an extra principle payment each month. This accelerates the payoff of the mortgage saving years of payments and thousands of dollars in interest.
The HARP loan refinance program is a necessary step in the right direction. Finally we have a refinance program that can help the majority of the borrowers who have paid their mortgage on time. Finally, there is a reward for borrowers to continue to pay their mortgage on time. Finally, we can reduce the cost of the home by reducing the interest rate.
HARP refinance program information:
• No loan to value restriction
• Refinance no appraisal
• Loan must be owned by Fannie Mae or Freddie Mac (look up tool here)
• No minimum credit score criteria
• No out of pocket costs
• No prepayment penalty
• Current loan closed on or before May 2009
• Available on 10, 15, 20, 25, & 30 year terms
• Property can be primary residence, second home, or investment
• If subject loan has mortgage insurance it will transfer to the new loan
• Income and employment information required