How HARP Works

For struggling home owners, the HARP can be of help to them. This is known as Home Affordable Refinance Program, which is created by the Federal Housing Finance Agency in March of 2009. The aim of this is to assist homeowners that have issues about refinancing their mortgages. The program was later on altered in 2011 which allows more people who are not qualified to avail of the low interest rates. This is specifically designed for people who are facing depreciation problems for their homes. HARP will guarantee the loans that the bank will give to individuals who are experiencing negative equity due to the state of the housing market in the country today.

In order for you to avail of the benefits of the program, you have to be qualified first. Here are some of the requirements of the government but additional criteria can be imposed by the mortgage servicer.

• The homeowner must not have a loan that is previously refinanced by HARP.
• The applicant must be current with their mortgage payments. There should be no late payments or not more than 30 days in the last six months. Also, there should be no late payment in the previous year.
• The current LTV or loan-to-value ratio of the property must not be greater than the specified 80%.
• Those who will avail of it must benefit from the loan through low monthly payments or to have a more stable product like from an ARM or adjustable-rate-mortgage to a fixed-rate mortgage.

The HARP is not for people who are delinquent with their payments or for those who are facing foreclosure proceedings. This is created for those who are prompt in paying their dues. This will serve as their reward for being responsible with their obligations with their loan. Furthermore, this will also assist homeowners who are struggling with the payments. The interest rate will be lowered so that it will be easier for them to meet their dues.

If you want to take advantage of the Home Affordable Refinance Program or HARP, you can have a talk with an experience broker. They know the ins and outs of the business and they have access to various lenders who could give them lower rates. If they will obtain it from the bank, it might be a bit expensive because they will have to deal with numerous investors.

Whether you will decide to choose a bank or a broker, you can definitely benefit from the low interest rates that will be given by the program. You can submit your application according to the requirements that will be asked from you by your chosen lender. Be prepared to supply information regarding your current loan, assets, your income, investments, and tax details from the recent years.