Even if you’re not underwater or in arrears on your mortgage, you probably would still love to lower your monthly payments. Who wouldn’t? Clearly, reducing one of your biggest monthly payments could make it easier to stay on budget.
You may have heard that the Home Affordable Refinance Program (HARP) can help. If you qualify, refinancing your home through this federal program could help you lower your interest rate, which, in turn, could help trim your monthly mortgage payments.
So what is HARP and how do you know if you qualify?
What is it?
The Home Affordable Refinance Program is a refinancing program designed to help homeowners who are current on their mortgages, but who may have been turned down for traditional refinancing because their homes have lost value. The program may help them obtain new, more affordable, more stable mortgage(s), according to MakingHomeAffordable.gov, a website operated by the Departments of the Treasury and Housing & Urban Development.
Are you eligible?
MHA says you may be eligible for the program if:
- Your mortgage is owned or guaranteed by Freddie Mac or Fannie Mae, and predates May 31, 2009.
- You haven’t previously refinanced under HARP (there are some exceptions, so check out the website).
- Your current loan-to-value ratio (how much you owe on the house versus how much it’s worth) is greater than 80 percent.
- You’re current on your mortgage and have made no late payments in the past six months and no more than one in the past 12 months.
- Your current mortgage servicer (the company that you make payments to) participates in HARP. Not all lenders do.
How do you apply?
First, you need to confirm that your mortgage is either owned or guaranteed by Fannie Mae or Freddie Mac. Then, you need to confirm that your mortgage servicer participates in the Home Affordable Refinance Program. Just as you would for traditional refinancing, you need to shop around to ensure you’re getting the best terms on your refinance.
The program won’t solve every homeowner’s mortgage woes, but if you qualify, this HARP can play beautiful music!