The benefits and requirements of HARP loans
The Benefits and Requirements of HARP Loans
If you're struggling to pay your mortgage and are looking for a way to lower your monthly payments, a HARP loan may be the solution you need. HARP, which stands for Home Affordable Refinance Program, was created by the federal government to help homeowners refinance their mortgages and avoid foreclosure. Here are some of the benefits and requirements of HARP loans:
Benefits of HARP Loans
- Lower Interest Rate: One of the main benefits of HARP loans is that they can help you secure a lower interest rate on your mortgage. This can significantly reduce your monthly mortgage payments, making it easier for you to keep up with your mortgage payments and avoid foreclosure.
- No Appraisal Required: Unlike traditional refinancing, HARP loans do not require an appraisal of your home. This can save you time and money, as you won't need to pay for an appraisal or wait for an appraiser to visit your home.
- No Equity Required: HARP loans are available to homeowners who owe more on their mortgage than their home is worth. This means that you can still qualify for a HARP loan even if you are underwater on your mortgage.
- Streamlined Process: The HARP loan program is designed to be easy and streamlined. There is less paperwork involved compared to traditional refinancing, and the process typically takes less time to complete.
Requirements for HARP Loans
- Fannie Mae or Freddie Mac-backed mortgage: To qualify for a HARP loan, your mortgage must be owned or guaranteed by either Fannie Mae or Freddie Mac. You can check if your mortgage is backed by one of these organizations by visiting their websites.
- Current on Payments: You must be current on your mortgage payments and have a good payment history. This means that you have not been more than 30 days late on your mortgage payments in the past 12 months.
- No Refinancing in the Past: You must not have previously refinanced your mortgage through HARP. The program is designed for homeowners who have not been able to refinance through traditional means.
- Loan Origination Date: Your mortgage must have originated on or before May 31, 2009, to be eligible for HARP refinancing.
- Loan-to-Value Ratio: Your loan-to-value (LTV) ratio must be greater than 80%. This means that you owe more on your mortgage than your home is currently worth.
If you meet these requirements, you may be eligible for a HARP loan. Keep in mind that HARP loans are only available for a limited time, so it's important to act quickly if you think you may qualify. Contact your mortgage servicer or a HARP-approved lender to learn more about the program and see if it's right for you.
Overall, HARP loans can provide significant benefits for homeowners who are struggling to pay their mortgage. With lower interest rates, no appraisal required, and a streamlined process, HARP loans can help you stay in your home and avoid foreclosure. If you think you may qualify for a HARP loan, be sure to explore this option and see if it's right for you.