Is refinancing available when my home has deprecated in value?
The HARP loan program (Home Affordable Refinance Program) may be the answer you are looking for. HARP has helped more than 3 million homeowners refinance into a lower interest rate and payment even though they owe more on their mortgage than their home is worth. HARP’s goal was to establish a means for struggling homeowners who are making their payments on time to refinance to more affordable loan terms regardless of their equity position. This program makes it possible to obtain refinancing on your mortgage regardless of how much your property value has deprecated. Borrowers with high debt obligations or low incomes can still qualify for the HARP loan program.
To be eligible for a HARP loan your current mortgage must be a conventional loan owned by either Freddie Mac or Fannie Mae and your current mortgage must have been originated before May 31, 2009. Other guidelines to the HARP programs is your current loan’s LTV (Loan To Value) must be greater than 80% at the time of HARP application. The borrower must not have had any late payments in the last 6 months, and no more than one late payment that was over 30 days late in the past year.
today’s HARP rates
HARP interest rates are generally as low or lower than a conventional loan refinance rates that require 20% equity. Your lender will advise you whether to get your home appraised, whenever there is an acceptable AVM (Automated Valuation Model) available no new appraisal is required. Homeowners with zero equity or negative equity can get qualified with competitive rates. Regardless if they have had previous applications declined they may still be eligible for a refinancing under HARP guidelines. This stable mortgage product is safe and a great option for lenders to offer to their customers.
HARP eligibility now
Another great benefit to HARP loans is that borrowers do not need mortgage insurance, regardless of loan-to-value, even if it is above 80%. However, if you have PMI on your current mortgage you’ll need to keep it on the new loan. Regulations prevent you from eliminating your current mortgage insurance by refinancing to a HARP loan.
HARP loans are available with 15, 20, or 30-year fixed rate loan terms, and 5, 7, or 10-year ARMS (Adjustable Rate Mortgages). HARP fixed rate mortgages are ineligible to be refinanced into an ARM. If the new loan the customer is refinancing into is an ARM the maximum loan to value becomes 105%.
This program was created as a temporary solution to the real estate crisis of 2008–2009, the FHFA has consistently extended the program, most recently doing so through