How to find the best HARP loan rates?
But how can you find the best HARP loan rates? In this article, we'll explore the ins and outs of HARP loans and offer tips on how to get the best interest rates.
What is HARP?
HARP was established in 2009 in response to the housing market crisis. It's a program that allows eligible borrowers to refinance their mortgage with lower interest rates or payment terms. HARP borrowers can refinance even if they're upside-down on their mortgage, meaning they owe more than their home is worth.
HARP is a government program, but it's not a loan. Instead, the program provides certain guidelines that lenders must follow when refinancing your mortgage. The program has undergone several changes and extensions over the years, so it's important to check whether you still qualify.
What are the benefits of a HARP loan?
One of the biggest advantages of a HARP loan is the ability to refinance with little or no equity in your home. As mentioned earlier, this is particularly helpful for homeowners who are upside-down on their mortgage.
In addition to lower interest rates, HARP loans typically come with fixed-rate terms, so you won't have to worry about your payments fluctuating over time. Some HARP refinance programs also allow for reduced fees or no appraisal requirement, making the process faster and easier.
Who is eligible for a HARP loan?
To be eligible for a HARP loan, you must meet the following requirements:
• Your mortgage must be owned or guaranteed by either Fannie Mae or Freddie Mac.
• Your mortgage must have been originated on or before May 31, 2009.
• Your current loan-to-value ratio (LTV) must be more than 80%.
• You must be current on your mortgage payments with no late payments in the past six months and no more than one late payment in the past year.
• You cannot have previously refinanced your mortgage under HARP, unless it was a Fannie Mae loan refinanced under HARP from March to May 2009.
If you meet all of these requirements, you may be eligible for a HARP loan. However, note that the program is set to expire on December 31, 2018, so you'll want to act quickly if you're interested in taking advantage of it.
Tips for Finding the Best HARP Loan Rates
1. Shop around: Just like with any loan, it's important to shop around to find the best rates and terms. Look at different lenders and compare their offers. Make sure to check both interest rates and fees, as these can affect your overall cost.
2. Check with your current lender: Your current lender may offer HARP loan options, so check with them first. They may offer incentives, like reducing your fees or waiving the appraisal requirement.
3. Improve your credit: Your credit score can impact your interest rate, so it's important to improve it before applying. Make sure to pay your bills on time and keep your credit utilization low.
4. Consider a shorter term: While a 30-year term may lower your monthly payments, it can also increase your overall cost. Consider a shorter term, like a 15- or 20-year loan, to save on interest.
5. Ask about points: Some lenders may offer discounted interest rates if you pay points upfront. However, make sure to do the math and calculate whether paying points is worth it in the long run.
6. Use a HARP mortgage calculator: These tools can help you estimate your monthly payments, total cost, and potential savings. Make sure to use one that's specific to HARP loans.
In Conclusion
HARP loans can be a great opportunity for homeowners who are struggling with their mortgages. With its government backing, the program offers unique benefits and guidelines that can help you refinance even if you're upside-down on your mortgage. To get the best HARP loan rates, make sure to shop around, improve your credit, and consider shorter terms or paying points upfront. By doing your research and making smart decisions, you can take advantage of this program and potentially save thousands of dollars in interest.