The Home Affordable Refinance Program (HARP®), is a federal program that was launched back in 2009. The program was recently extended, and is available through December 31, 2018.
Refinancing when you have experienced a decline in the value of your home can be difficult with other refinancing loan options. Choosing to refinance through HARP® can help you to obtain a more stable and affordable mortgage. It is designed to help homeowners who owe more on their mortgage than their home is worth (or have little to no equity in their home) to take advantage of lower mortgage rates and other refinance benefits.
HARP® may help you obtain one or more of the following benefits of refinancing:
- A reduction in your mortgage rate
- A lower, more affordable monthly mortgage payment
- Change to a fixed-rate mortgage from an adjustable-rate, interest-only, or balloon/reset mortgage
- A reduction in the term of your mortgage (e.g., from 30 years to 15 years)
HARP® Loan Requirements:
- The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009
- Have a current loan-to-value ratio greater than 80 percent, with a maximum loan-to-value ratio of 125%. (Essentially, you owe more than your home is worth).
- The person applying must be up-to-date on their mortgage at the time of refinancing and must be in good standing for the past 12 months payment history
- The current mortgage payment must not contain private mortgage insurance
- Loan must show a benefit to the borrower
- Owner occupied, investment properties, and second homes are eligible for refinancing through HARP®
You have two options for refinancing through HARP®:
- Work with your existing lender if they participate in the program. Your lender is the company you send your monthly mortgage payments to. Since they already have your information and documentation, there are fewer requalification steps. An exception would be if your principal and interest payment has gone up more than 20%. If this is the case, your lender will need to requalify and re-underwrite your new loan.
- Work with a different lender who does participate in the program. If this is the case, then the new lender will need to requalify and re-underwrite your new loan because they will not have your information or documents.
HARP® Refinancing FAQs
- What does it mean to “refinance”? When you refinance your mortgage, you are applying for a new mortgage to replace your current home loan.
- Can I refinance my property if it is not my primary residence? Yes. In addition to your primary residence, HARP® allows you to refinance an investment property or second home.
- Can I refinance the loan on my condo? Yes, HARP® allows mortgages on condominiums to be refinanced.
- If my loan has been previously modified, can I still refinance through HARP®? So long as your original loan meets the basic eligibility requirements, you may be able to refinance with HARP®.
- What if I am not eligible for HARP® but I still want to refinance my current mortgage? HARP® is only one of several refinancing options that may be available to you.
- Will I have to pay closing costs? Maybe, but closing costs can be rolled into your new loan to avoid having to pay them out of pocket at closing. You can contact our office to learn more about HARP® refinancing and how it will affect you.
- Will my home need to be appraised? In most cases, no.
- Will I have to make a down payment? No, HARP® refinancing does not require a down payment to be made.
- What if I was not approved the last time I applied for refinancing? The guidelines for HARP® may have changed since you last applied, so you may qualify this time around.