Homeowners who are “under water” with their mortgages now have a lifeline - changes to the government’s Home Affordable Refinance Program (HARP) allow more Americans to qualify for a lower interest rate, which translates to lower monthly mortgage payments.
First, let’s set the stage. When a homeowner is under water, that means he or she owes more on a home than it is worth in the current market.
That happened to many homeowners after the housing bubble burst in 2007 and 2008, and house prices declined sharply.
Generally speaking, lenders will not refinance a home mortgage when a borrower is under water.
President Obama signed HARP in 2009, with the idea of providing more flexibility to borrowers and lenders and help keep people in their homes. And this year, the law has been changed to allow even more homeowners to qualify.
The key change is there is no longer a limit on how far under water a borrower can be and still qualify for a refinance loan. If you owe $400,000 and your home is worth $200,000, you may be eligible to refinance under “HARP 2.0.”
As of March 17, Guild Mortgage Co is offering refinance loans under the new guidelines through our “Refi Plus” program.
There are still certain rules for qualifying. The loan must have been sold to Fannie Mae or Freddie Mac (two government entities that purchase mortgage loans from financial institutions) prior to June 1, 2009.
Borrowers must be current on their payments for the past 12 months, and have a source of income to pay back the loan.
With interest rates hovering near historic low homeowners can potentially save hundreds of dollars per month on their mortgage payment, depending on their current interest rate and the amount of their loan.
For those whose mortgages are currently serviced by Guild, paperwork can be kept to a minimum, and some borrowers won’t even need a full appraisal. Refinance transactions can often be completed from start to finish in 30 days.
So, anyone who thinks they may qualify for refinancing under HARP 2.0, please contact us directly to get your refinance started. If you sit on the fence and wait for interest rates to go down further, you may lose your window of opportunity.
• Freddie Mac and Fannie Mae have adopted changes to the Home Affordable Refinance Program (HARP) and you may be eligible to take advantage of these changes.
• If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP.
• You can determine whether your mortgage is owned by either Freddie Mac or Fannie Mae by checking the following websites: www.freddiemac.com/mymortgage or www.fanniemae.com/loanlookup/.
Call me anytime to discuss.