In conventional mortgage refinance, you should have substantial equity in your home, in order to become eligible for mortgage refinance, but the Home Affordable Refinance Program (HARP) has been aimed at helping the homeowners to refinance their mortgages even if their outstanding balance is more than the current market price of their home. This particular program came into effect especially after the sub prime mortgage crisis in the country.
The primary motive behind this special mortgage refinance brings the borrowers in a relatively better position by lowering down the principal amount and as well as the interest payment, reducing the amortization period or to switch from a comparatively risky loan structure to a more stable product. If you want to apply for HARP, you can contact any mortgage lender that offers the Fannie Mae DU Refi Plus or Freddie Mac Open Access, however, not all the mortgage lenders participate in HARP. You can also contact Freddie Mac or Fannie Mae directly, if you want to know whether or not you are eligible for HARP.
This refinance program was introduced in 2009 and the program will continue till 31st December, 2013. These mortgages are backed by Freddie Mac and Fannie Mae. You need to fulfill certain criteria in order to become eligible to obtain this mortgage refinance facility. These eligibility criteria are listed below.
- First of all, you must reside in a home that is being refinanced.
- In order to become eligible for HARP facility, your original mortgage must be backed by Freddie Mac or Fannie Mae.
- Most importantly, terms and conditions should be such that new mortgage is very much affordable to the borrowers.
- To be eligible for this program, you the borrower, should not default in making payments in the last one year.
- The loan to value ratio must be more than 80%.
While applying for HARP, you must follow certain tips. These tips are listed below.
- First of all, you need to determine whether or not your mortgage is backed by either Freddie Mac or Fannie Mae. This is the basic criteria to become eligible for HARP.
- It is recommended that if you want to get such mortgage refinance, you can contact your original mortgage lender. If your lender is approved by HARP, then you can opt for mortgage refinance. Otherwise, you need to contact Freddie Mac or Fannie Mae to see whether or not you are eligible for HARP.
- Finally, you need to compare different mortgage rates so as to make the final decision.
You can also obtain valuable information on HARP by researching the home affordable mortgage.