Home Affordable Refinance LogoThere has been some exciting news which was recently released by Fannie Mae and Freddie Mac.  These two government agencies who help support the housing financial system, have announced that they are loosening some of the guidelines on their popular Home Affordable Refinance Program also known as HARP.  This ultimately means that it will be easier for you to refinance and while you’re doing it get a better interest rate too.

One of the original benefits of HARP is that it allows homeowner’s to refinance even if they have lost equity in their home.  Under the current HARP program which was started in April of 2009, homeowners could refinance their homes even if they owed more on their home then it was worth.  They could get financing up to 125% of their appraised value.  The prospective borrower would not be able to get out extra money or consolidate debt through this refinance but would be able to get a lower interest rate and payment.  The government was effectively helping homeowners lower their overall monthly payments for those who might not normally qualify for the lower rates.  To qualify for the HARP program your loan would have to be owned by Fannie Mae or Freddie Mac (Find out if your home is owned by Fannie Mae or Freddie Mac by clicking the links).  Theoretically, this program was meant to help the U.S economy by allowing homeowner’s to refinance and save money on the their monthly payments.

HARP Program Updates

On December 1st, 2011 further enhancements to the HARP program were announced which made it even easier to qualify for this program.  Basically, the loan to value limit of 125% (seen above) has been whipped away which means it may no longer matter what your house is worth.  If it no longer matters what the value of your home is worth you may not even need an appraisal.  The government has estimated that 80% of all homeowners who refinance through this program will not need an appraisal.  This “no appraisal” requirement is set to be activated by most Mortgage Lenders by February or March of 2012.

In addition to the appraisal feature named above the government also announced that the interest rates would also get better for homeowner’s utilizing this program.  The old version of the Home Affordable Refinance Program typically had higher interest rates for those borrower’s who had less equity in their homes.  This new announcement states that most of the interest rate increases that currently exist will be whipped away.  This effectively allows homeowner’s to qualify for the same interest rate as those with lots of equity in their home.

There are many more benefits which were announced but these two enhancements to the HARP program are the most instrumental to those homeowner’s who have been thinking about refinancing but not sure if they could qualify because their home has lost value.  If you feel you could benefit by refinancing but are still unsure please call our toll free number at 800-555-2098.  We can help answer questions you might have and check to see if you may be eligible to qualify for this great program.

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