In an effort to help out homeowners who find themselves “underwater” (owing more money than their home is worth) President Obama announced changes to the 2009 Home Affordable Refinance Program (commonly known as HARP) The changes, announced 2 days ago, will make many more homeowners eligible to refinance their mortgages and take advantage of the record-low interest rates now being offered. A cheaper mortgage payment every month would provide much needed relief to cash-strapped families who are struggling to make ends meet. Other changes to HARP are designed to streamline the process and eliminate costs to make it as easy as possible for folks to refinance.
The initiative aims to address an ongoing problem of the housing crisis: That there are millions of homeowners who work hard and pay their mortgage every month, whose home values are plummeting through no fault of their own. These people need help, not to get out of their mortgage, but to stay in their mortgage and continue to pay. The Obama administration is hoping to stem a growing trend of “walking away” from one’s mortgage. (To simply stop paying the mortgage, deliberately allowing the house to fall into foreclosure) In fact HARP is unique because it is the only refinancing program that enables borrowers who are “under water” to take advantage of refinancing benefits. In essence offering help to those who need it most.
Other helpful changes include eliminating the requirement for a new appraisal in order to refinance, which was both a time consuming and costly step in an already difficult process. They also eliminated refinancing fees for borrowers who are considered “risky” (an unflattering and generally inaccurate term) and extended all of these new HARP benefits until the end of 2013; all in an effort to get more people on board. Think you might qualify for HARP and want to take advantage? Below are a few of the requirements for HARP eligibility. If you meet these requirements, we strongly recommend you contact your lender and refinance. It could really help you save a lot of money.
Do You Qualify For HARP?
1.) Determine who is your loan servicer (Chase, Bank of America, Wells Fargo). They will be your first point of contact and will probably have a representative that can help get you started with refinancing.
2.) Who owns your loan? (HARP only applies to Fannie May and Freddie Mac loans, which are guaranteed by the U.S. government) Not sure if your loan is owned by Fannie or Freddie? It’s very easy to look up and see if either Freddie Mac or Fannie Mae are the underwriter for your loan.
3.) You must have closed on your loan before May 31st, 2009
4.) You must be current on your loan and have no late payments in the last 6 months, and no more than 1 late payment in the last 12 months.
We see this as a positive step by the Obama Administration to help struggling homeowners. But like anything else, these benefits will only work if people take advantage of them. If you think you have the slightest chance of qualifying, we’d encourage you to refinance and save yourself some money! Check back to our blog for more tips to lower your costs of home ownership.
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