H.A.R.P stands for Home Affordable Refinance Program. Several years ago, the government extended the program, creating HARP 2.0. Intended to help struggling homeowners after the mortgage crisis, HARP can be used to refinance homes with declining values. Typically, the value has declined well below what is owed on the mortgage. Borrowers can refinance into a more affordable and sustainable home loan rate. Stonebriar Mortgage breaks down the HARP 2.0 program for Dallas, TX and California homebuyers in this week’s blog post.
Am I Eligible for HARP 2.0?
You may be asking yourself: this program is quite old, am I still eligible for HARP 2.0? Below are the basic eligibility criteria, you may qualify if:
- The loan is owned or guaranteed by Fannie Mae or Freddie Mac.
- The mortgage has been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
- The mortgage was not refinanced under HARP previously (unless it is a Fannie Mae loan that was refinanced under HARP from between March and May of 2009).
- The current loan-to-value (LTV) ratio is greater than 80 percent.
- You are current on your mortgage payments with no late payments in the last six months and no more than one late payment in the last 12 months.
The program known as HARP 2.0 expired in December 2018, however similar programs exist. The Federal Housing Agency has launched a Fannie Mae High Loan-to-Value refinance option and a Freddie Mac Enhanced Relief Refinance (FMERR). These programs extend HARP with slightly different requirements.
What Can I Do with These Refinance Relief Programs?
Through these various relief programs, homeowners can obtain lower interest rates (lowering monthly payments), shorten the term of their loan, and modify their loan from an adjustable-rate to a fixed-rate mortgage. There is no minimum credit score required, which has eased restrictions for struggling borrowers. Many people are saving thousands per year by taking advantage of these programs. Some are getting rates that are 30% lower than in the past.
If you choose to shorten your loan term, your monthly costs may go up, but you will build equity in the home more quickly. By applying to restructure or refinance the mortgage, you will have to go through an application and approval process. You may have to pay closing costs in the end to get paperwork completed.
How Do I Apply for Relief?
Start applying for relief by calling your mortgage company. Obtain information on all loans you currently have and gather your financial documentation for the application. You do not have to continue struggling with bad loans. Stonebriar Mortgage is here to help Dallas, Texas and California homeowners some relief. Contact our local offices today for more details!