The Home Affordable Refinance Program (HARP) has been extended until December 31, 2015. This extension allows homeowners to refinance into low mortgage interest rates even if the property has decreased in value or is upside down. “Upside Down” simply means that you owe more on your home than it is currently worth. The HARP mortgage was established in 2009, for homeowners who’s mortgage is backed by either Fannie Mae or Freddie Mac.
A HARP mortgage addresses situations where the homeowner’s property value has fallen causing them to no longer to qualify under traditional refinancing criteria.
New HARP Mortgage Criteria:
- A HARP refinance only applies to Fannie Mae or Freddie Mac mortgage.
- The homeowner must be able to afford the new lower payment.
- The current mortgage must be up to date with no late payments in the past twelve months.
- Payments on the new loan must be more affordable or more stable than on the existing loan.
- The maximum Loan to Value (LTV) cap has been removed on home owners looking to refinance in to a fixed rate mortgage.
- However for homeowners looking to refinance in to an adjustable rate mortgage the maximum LTV is set at 105%.
If you do not fit the current HARP mortgage criteria:
There is a piece of legislation sitting in Congress that would expand the availability of the HARP mortgage program to non-Fannie/Freddie backed mortgages. Private Equity has also reentered the market with programs like the “Second Chance Refinance” which do not require a government backed mortgage but may require a higher credit score.