Refinance your home with HARP loans: Here’s everything you need to know!
If you’re a homeowner struggling with high mortgage payments, you may be wondering if there’s a way to reduce your monthly payments and save money. One option you may want to consider is refinancing your home with a HARP (Home Affordable Refinance Program) loan. In this guide, we’ll explain what HARP loans are, how they work, and how you can determine if you’re eligible.
What are HARP loans?
HARP loans were introduced by the federal government in 2009 to help struggling homeowners refinance their mortgages and avoid foreclosure. HARP loans are designed specifically for homeowners who owe more on their mortgages than their homes are worth (i.e. are “underwater”).
The program allows eligible homeowners to refinance their mortgages into more affordable, stable loans with lower interest rates and monthly payments. HARP loans are available through participating lenders across the country.
How do HARP loans work?
Here’s how the HARP loan process works:
- Check eligibility: The first step in obtaining a HARP loan is to determine if you’re eligible. To be eligible, you must have a Fannie Mae or Freddie Mac mortgage that was originated on or before May 31, 2009, and meet other criteria such as being current on your mortgage payments and having a loan-to-value ratio of greater than 80%.
- Apply for a HARP loan: If you’re eligible, the next step is to apply for a HARP loan through a participating lender. You will need to provide documentation such as income verification, credit scores, and mortgage statements.
- Appraisal: Typically, a home appraisal is not required for a HARP loan as long as a reliable automated valuation system can provide an accurate estimate of your home’s value.
- Loan approval: Once you are approved for a HARP loan, you will receive a new mortgage with more favorable terms, such as a lower interest rate, lower monthly payments, or a shorter loan term.
Why refinance with a HARP loan?
There are several benefits to refinancing with a HARP loan:
- Lower monthly payments: Refinancing with a HARP loan can lower your monthly payments by reducing your interest rate or extending your loan term.
- Save money: With lower monthly payments, you can save money over the life of your loan.
- Stable payments: Refinancing with a HARP loan can provide more stable monthly payments, making budgeting and financial planning easier.
How to determine if you’re eligible for a HARP loan
To determine if you’re eligible for a HARP loan, you can use the eligibility lookup tool on the HARP website. You will need to provide your mortgage information, such as your loan amount and monthly payment, as well as your address and social security number.
If you’re not eligible for a HARP loan, you may still be able to refinance with another type of loan, such as an FHA or VA loan. Talking to a mortgage professional can help you determine which option is best for you.
Conclusion
If you’re a homeowner struggling with high mortgage payments, refinancing with a HARP loan may be a good option for you. Not only can it lower your monthly payments and save you money, but it can also provide more stable payments for easier financial planning. Be sure to check your eligibility and talk to a mortgage professional to determine if a HARP loan is right for you.