New HARP guidelines will help

I love hearing good news for homeowners having trouble paying their mortgage.  I keep having to remind my friends and clients that “You’re not the only one dealing with this.”  For those of you who don’t know, HARP (Homeowner Affordability Refinance Program) is a government program that was designed to help homeowners refinance.  Great news just announced last week:  Even if you’re underwater on your mortgage, you can still refinance!

Here’s the status on what you need to know.  Below is a list of those eligible to possibly refinance with HARP funds under this program:

1. Your loan must be owned by Freddie Mac or Fannie Mae.  You can contact your lender to find out.  Or you can look this up online by clicking here for Freddie Mac and here for Fannie Mae.

2. You currently owe more than the house is worth.  For those of you that this doesn’t apply to, you’ll be able to regularly refinance by contacting a mortgage lender.

3. Currently have an interest rate higher than prevailing rates.  However, if your interest rate is 4.5% right now, you wouldn’t qualify because rates aren’t that low.  Be thankful that your rate is so low. 🙂

4. Would have to pay mortgage insurance by refinancing.  There is no PMI or mortgage insurance through the HARP program.

5. Have a decreased monthly income due to job loss or job change and couldn’t refinance.  You will still need to show that you can afford the new monthly payments.

As a reminder, you do not need to meet all five of the above criteria.  Just one is acceptable.  The only thing  that is required is that the loan is currently owned by Freddie Mac or Fannie Mae.  Lenders through HARP are currently refinancing for up to 105% of the home’s current value.  

Aside from having no mortgage insurance with these HARP loans, oftentimes it’s not required that an appraisal be done on the home.  Plus closing costs are generally lower with more lenient underwriting.

If you want to find out if you qualify to take advantage of this program and need the name of a great lender, please e-mail me at noah.seidenberg@cbexchange.com or visit me online.

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