What to expect during the HARP loan application process?
What to Expect During the HARP Loan Application Process?
Introduction
If you're looking to refinance your mortgage and take advantage of the HARP program, you may be wondering what to expect during the application process. The Home Affordable Refinance Program (HARP) was created to help homeowners who are underwater on their mortgage, which means they owe more on their mortgage than their home is currently worth. If you're in this situation, HARP may be able to help you refinance your mortgage and save money on your monthly payments. In this article, we'll go over what to expect during the HARP loan application process, from eligibility requirements to documentation and more.
Eligibility Requirements
The first step in the HARP loan application process is determining if you're eligible. To qualify for HARP, you must:
- Have a mortgage owned or guaranteed by Fannie Mae or Freddie Mac
- Have taken out your mortgage on or before May 31, 2009
- Be current on your mortgage payments with no late payments in the past six months
- Have a loan-to-value ratio of greater than 80%
- Not have previously refinanced your mortgage under HARP, unless it was a Fannie Mae loan that was refinanced between March and May 2009
If you meet these requirements, you may be eligible to apply for HARP.
Documentation
Once you've determined that you're eligible for HARP, the next step is to gather the necessary documentation for the loan application. This may include:
- Proof of income, such as tax returns and pay stubs
- Proof of employment, such as a letter from your employer or recent pay stubs
- Copies of your mortgage statements
- Information about any second mortgages or liens on your home
- Recent property tax and homeowners insurance statements
- A complete financial statement, including assets and liabilities
The lender may request additional documentation as well, so it's important to be prepared and have all necessary paperwork organized and ready.
The Loan Application Process
Once you've gathered all necessary documentation, you can begin the loan application process. This typically involves completing an application form and submitting it to your lender, along with the required documentation. The lender will then review your application and determine if you meet the eligibility requirements for HARP.
If you're approved for HARP, the lender will then proceed with the underwriting process, which involves verifying your income and other financial information, ordering an appraisal on your home, and ensuring that you meet all other requirements for the loan. Once the underwriting process is complete, the lender will provide you with a loan estimate that outlines the terms of your new mortgage, including the interest rate, monthly payment, and loan term.
Closing the Loan
If you agree to the terms of the loan estimate, you will be required to sign closing documents and provide any additional documentation requested by the lender. This may include proof of homeowners insurance, a copy of the property deed, and a written authorization to release information to the lender. Once all documentation is in order, the lender will schedule a closing date with you.
At the closing, you'll sign the final loan documents and pay any applicable closing costs, such as appraisal fees, loan origination fees, and title insurance premiums. Once the closing is complete, your new mortgage will be recorded with your county recorder's office, and you'll begin making your monthly payments according to the terms of your new loan.
Conclusion
The HARP loan application process can seem daunting, but with careful planning and preparation, it can be a relatively straightforward process. Remember to gather all necessary documentation, complete the application accurately, and be prepared to provide additional documentation as requested by your lender. With a little bit of patience and perseverance, you could be on your way to a more affordable mortgage payment and the peace of mind that comes with it.