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The Obama Home Affordable Refinance Program HARP
What Is Home Affordable Refinance Program?
The home affordability refinance program (HARP) is an integral part of President Obama’s MHA schedule that was initiated in early 2009 for stabilizing the sagging housing market and the U.S. economy. The HARP deals with provision of low rate home refinancing loans using federal funds to borrowers whose home values have declined. The government program will remain in effect until the end of December 2013.
Homeowners who have very little or no equity left in their homes can refinance through the federally supported Obama home affordable mortgage program HARP and make monthly payments more sustainable over the long run. Interest rates being provided on home refinancing loans under HARP could be as low as 2% and therefore, thousands of dollars could be saved annually. Traditionally, lenders may not approve refinance home loan applications if homes have lost values but that is not the case with the HARP. One can refinance existing home loan if eligible.
Home Affordable Refinance Program Guidelines
A federal home mortgage refinance loan is not a gift but you have to prove your worth for receiving its benefits. Your probability of qualifying for government refinancing grants will depend on your ability to meet the below mentioned HARP guidelines.
You could explore your chances of getting qualified for a HARP loan if:
- You are the owner as well as primary occupant in a 1 to 4 unit family home.
- Your existing mortgage loan has originated either on or before 1st of January, 2009.
- Your current mortgage is owned or guaranteed by either Fannie Mae or Freddie Mac.
- You have been regular in paying present monthly installments for the past 6 months.
- You have one single missed payment not exceeding 30 days during last 12 months.
- You have a Loan-To-Value (LTV) ratio of 80% for a fixed rate mortgage or LTV of 105% for an ARM.
- You have a stable monthly income and can demonstrate ability to pay new monthly installments.
Home Affordable Refinance Program Requirements-Few Vital Elements
The entire qualification criteria which apply to HARP refinancing can be summed up so that readers have a fair idea if not a detailed one with reference to determination of their chances of getting approved for the HARP. To that effect, you may take note of certain important ingredients that are associated with refinancing through the Obama home affordable mortgage program are as under:
You may consider taking advantage of certain enhancements that apply to the HARP 2.0 initiative. Some of the HARP 2.0 requirements are as follows:
- Program will be available till 31st December 2013
- Search for lenders that participate in the HARP plan
- Loans must have been approved before 1st June 2009
- It’s possible to refinance even if there is no home equity
- There are no limits prescribed for minimum credit scores
- Mortgage fees have been reduced for loans with short terms
- Borrower must have paid at least 11 monthly payments on time
- Only one mortgage can be refinanced with the HARP refinance
- No new home appraisal is needed to be undertaken for refinancing
- Private mortgage insurance not required if current loan doesn’t have it
- Second homes or even investment properties will now be permitted
Crucial Parameters That Make You HARP Ineligible:
You will not be eligible for the HARP refinance program if you:
- Currently have a FHA, VA, USDA or Jumbo mortgage
- Have failed to maintain regularity on monthly payments
- Are on the lookout for cash out refinance to draw money
- Do not have enough monthly income for paying installments
- Have a home Loan-To-Value or LTV ratio which is less than 80%
Certain Key Benefits Offered By the HARP Plan:
- Low home affordable refinance program rates
- Upper LTV ratio caps have been totally removed
- All types of properties are eligible for refinancing
- Borrowers can compare numerous HARP proposals
- More borrowers can qualify due to relaxed guidelines
You will have to learn how to qualify for home affordable refinance program as it is not that easy to get approved for the HARP. Remember, apart from satisfying qualification criteria, borrowers will also need to prepare and furnish correct as well as accurate documentation for improving their chances of getting a HARP approval. Hence, it is always better to seek advice from a competent professional.
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