Introduction
Welcome to our guide about Home Affordable Refinance Program (HARP) loan refinance options. If you’re struggling with your mortgage payments or want to take advantage of low-interest rates, HARP loan refinance may be the right solution. In this article, we’ll provide you with a comprehensive overview of HARP loan refinance, its requirements, eligibility, benefits, and how to apply for it.
Before we dive into the details, let’s clarify what HARP loan refinance is and why it’s important. HARP is a federal government program established in 2009 as part of the Making Home Affordable initiative aimed at assisting homeowners who owed more on their homes than their current market value. This program enables eligible homeowners to refinance their mortgages at a lower interest rate, even if they have little to no equity in their homes. The program was set to expire in 2018, but later extended until December 31, 2021, to provide more opportunities for struggling homeowners to refinance their homes.
In the following sections, we’ll provide you with all the information you need to know about HARP loan refinance, including how it works, who qualifies for it, the benefits, and how to apply for it.
What is HARP Loan Refinance?
How Does HARP Loan Refinance Work?
The HARP program is designed to help eligible homeowners who are struggling to make their monthly mortgage payments by refinancing their current mortgage into a more affordable and stable loan. The program does not modify the principal balance or reduce the amount owed on the loan. Instead, it allows borrowers to refinance their mortgage at a lower interest rate, making their payments more affordable and reducing the total amount of interest paid over the life of the loan.
One significant advantage of HARP loan refinance is that it doesn’t require a minimum credit score or appraisal. The program also allows borrowers to refinance even if they owe more on their mortgage than their home is worth or have a second mortgage, which is not usually allowed under conventional refinancing programs. HARP loan refinance also offers flexible terms and repayment options, including fixed-rate, adjustable-rate, and interest-only loans.
Who Qualifies for HARP Loan Refinance?
To be eligible for HARP loan refinance, you must meet the following requirements:
Criteria |
Requirement |
---|---|
Ownership |
You must own and occupy the property, or the property must be a second home or investment property that does not have more than four units. |
Mortgage |
You must have a mortgage loan owned or guaranteed by Freddie Mac or Fannie Mae, which was purchased before May 31, 2009. |
Payment |
You must be current on your mortgage payments, with no more than one late payment in the past 12 months. |
Refinance |
You must not have previously refinanced your mortgage under HARP, unless it was a Fannie Mae loan that was refinanced from March to May 2009. |
Loan-to-Value Ratio |
Your loan-to-value (LTV) ratio must be greater than 80%, indicating that you have little or no equity in your home. |
Credit Worthiness |
Your credit score or credit history does not affect your eligibility for HARP loan refinance. |
What are the Benefits of HARP Loan Refinance?
HARP loan refinance offers several benefits, including:
- Lower interest rates, which can reduce your monthly mortgage payments
- Fixed-rate or adjustable-rate loans, which can provide flexibility in your repayment terms
- No appraisal or minimum credit score requirements, which can save you time and money
- No mortgage insurance premium (MIP) or private mortgage insurance (PMI), which can also reduce your monthly payments
- Opportunity to switch from an adjustable-rate to a fixed-rate mortgage, protecting you from sudden increases in interest rates
How to Apply for HARP Loan Refinance?
If you think you’re eligible for HARP loan refinance, you can start by contacting your mortgage lender to see if they participate in the program. You can also visit the official HARP website to find out if you qualify and explore your options. Once you have found a participating lender, you will need to provide them with the necessary documents and information, including:
- Your mortgage statement and payment history
- Proof of income and employment
- Other financial documents, such as tax returns, bank statements, and debt-to-income (DTI) ratio
After reviewing your application, the lender will determine whether you qualify for HARP loan refinance and provide you with a new loan offer. If you accept the offer, you will need to sign the loan documents and pay the closing costs associated with refinancing. Once the loan is approved, you can start enjoying the benefits of a more affordable and stable mortgage.
FAQs
1. What is the deadline for HARP loan refinance?
The deadline for HARP loan refinance is December 31, 2021. After 2021, the program will no longer accept new applications.
2. Can I refinance my home under HARP if I have a second mortgage?
Yes, you can refinance your home under HARP even if you have a second mortgage, as long as you meet the other eligibility requirements.
3. Will HARP loan refinance reduce my principal balance?
No, HARP loan refinance does not modify the principal balance or reduce the amount owed on the loan. It only allows borrowers to refinance their mortgage at a lower interest rate, making their payments more affordable and reducing the total amount of interest paid over the life of the loan.
4. Is HARP loan refinance available for homeowners with FHA or VA loans?
No, HARP loan refinance is only available for homeowners with mortgages owned or guaranteed by Freddie Mac or Fannie Mae.
5. What is the minimum credit score required for HARP loan refinance?
There is no minimum credit score required for HARP loan refinance. Your credit score or credit history does not affect your eligibility for the program.
6. Can I refinance my investment property with HARP loan refinance?
Yes, you can refinance your investment property with HARP loan refinance as long as it does not have more than four units and meets the other eligibility requirements.
7. Can I qualify for HARP loan refinance if I have a late payment on my mortgage?
You can still qualify for HARP loan refinance if you have no more than one late payment in the past 12 months.
8. What is the difference between HARP loan refinance and HARP replacement?
HARP replacement (High Loan-to-Value Refinance Option) is a new program launched in 2019 to replace HARP loan refinance. It is also aimed at assisting homeowners with little or no equity in their homes to refinance their mortgage at a lower interest rate, but with different requirements and benefits.
9. How long does it take to close on a HARP loan refinance?
The time it takes to close on a HARP loan refinance may vary depending on several factors, such as the lender’s processing time, the completeness of the application, and the complexity of the loan. However, the process can generally take between 30 and 45 days.
10. Can I use HARP loan refinance to replace my adjustable-rate mortgage?
Yes, you can use HARP loan refinance to replace your adjustable-rate mortgage with a fixed-rate mortgage, protecting you from sudden increases in interest rates. However, you must meet the other eligibility requirements.
11. Does HARP loan refinance require mortgage insurance?
No, HARP loan refinance does not require mortgage insurance premium (MIP) or private mortgage insurance (PMI), which can also reduce your monthly payments.
12. Can I get cash-out with HARP loan refinance?
No, HARP loan refinance does not allow borrowers to get cash-out or use the loan for any other purpose than to refinance their existing mortgage.
13. Can I refinance my mortgage multiple times with HARP loan refinance?
No, you can only refinance your mortgage once under HARP loan refinance, unless it was a Fannie Mae loan that was refinanced from March to May 2009.
Conclusion
If you’re struggling to make your mortgage payments or want to take advantage of low-interest rates, HARP loan refinance may be the right solution for you. This federal government program enables eligible homeowners to refinance their mortgages at a lower interest rate and more favorable terms, regardless of their credit score or home equity. In this article, we have provided you with a comprehensive guide on HARP loan refinance, including its requirements, eligibility, benefits, and how to apply for it. While the program is set to expire in December 2021, there’s still time to explore your options and see if you qualify for this valuable program. Take action today and start enjoying the benefits of a more affordable and stable mortgage.
Closing Disclaimer
This article is solely for informational purposes and does not constitute legal or financial advice. Before applying for any mortgage refinancing program, you should consult with a licensed professional to assess your financial situation and determine the best course of action for you. We do not endorse any particular lender or service provider and are not responsible for any damages or losses resulting from your reliance on this information.