Refinancing volumes remain high for the Home Affordable Refinance Program (HARP). With media spreading the word to homeowners that are paying high rates, many homeowners are benefiting from the HARP 2.0 program updates.
HARP 2.0 Home Affordable Refinancing
The Home Affordable Refinance Program (HARP) was announced by the Obama administration near the end of 2009 as way to stimulate the economy and allow more money to flow into business. The Federal Reserve also started purchasing Mortgage Backed Securities (MBS) to also allow mortgage rates to fall. This helped to create the prefect refinancing environment for the average homeowner.
The benefiting of HARP refinancing is mainly that the program allow more flexibility to homeowners that have lost value in their homes due to falling home prices, foreclosures and shortsale. Without a major push from the Obama Administration, underwater refinancing would have been impossible.
Since the inception of the Home Affordable refinance Program, there have been more than two million U.S. homeowners that have been able to benefit by refinancing to lower interest rates regardless of their home’s value. The HARP program has been considered a very successful refinancing program which has sent the housing markets back on track to stability.
HARP Refinancing Reduces Monthly Payments
When HARP was announced, mortgage rates were hovering from 5.875% to 7.25% for a prime conventional borrower. Since the announcement of HARP, mortgage rates have fallen more than 2 percent from their recent highs allowing for substantial monthly payment reductions.
For example, if we were to compare a typical mortgage prior to the HARP program to the mortgage interest rates for a typical HARP refinance we would see significant monthly savings.
A 30 year fixed mortgage with a Loan Amount of $200,000 at 6.75% would give a homeowner a payment of $1297.20 per month. After a HARP refinance, if the homeowner were able to drop their mortgage to 4.75% the new mortgage payment would be dropped down to $1043.29 per month. This equals a savings of $253.91 per month or $3046.92 annually.
The aforementioned example clearly shows how significant the HARP refinancing savings can be for the average homeowner.
**NOTE: Rates and terms may vary based on each individual’s situation. Above example is for illustration purposes only and assumes a 100% or less loan-to-value, 740+ credit, and $200,000 loan amount for a 30 year fixed rate mortgage. Not all will qualify, call a loan officer at Riverbank Finance for additional information and details on programs based on your situation.
Apply for a HARP Refinancing
There are many factors that determine eligibility for a HARP refinance such as mortgage date, loan holder and income qualification. If you believe you are HARP mortgage eligible then it is important that you act fact. The program is set to expire and mortgage rates are on the rise.
Fannie Mae and Freddie Mac do not refinance mortgage loans directly. To apply for a HARP refinancing mortgage you must contact an approved mortgage company such as Riverbank Finance LLC. While many people decide to call their current mortgage servicer it is important to note that not all programs are the same. Many banks and lenders add unneeded restrictions making it harder to qualify for a HARP refinance.
With current HARP refinancing guidelines homeowners may be able to qualify with no appraisal and little documentation. We would recommend calling us today at 800-555-2098 or requesting information below to determine eligibility.