Select a page
Agents are Available 24/7 - Call for a Quote! (855)780-8271

HARP Refinance

HARP RefinanceThe “HARP refinance” is a buzz term that many homeowners are hearing about but few understand. Let’s review the history of the HARP Program here, taking a trip down a memory lane that many homeowners would just as soon forget.

The History of the HARP Refinance

After the housing market crashed in 2006, many homeowners ended up in a difficult situation. While the value of houses dropped and dropped some more, the inventory of houses stock piled nationwide. For homeowners that had purchased their home as a major investment, most experienced a decrease in value, and most saw so much of a decrease in value, they owed more on their mortgage than their home was worth. It was like watching 100 dollar bills blow out of your wallet, into the wild winds, and there is nothing you can do.

As a result, when homeowners with a decrease in home value applied to refinance their homes to get lower interest rates, many were denied because banks require your LTV (loan-to-value) to be 80% or less in order to qualify for the lowest rates.  An LTV of over 80% also required PMI (private mortgage insurance), which added to mortgage payments and ate up all the saving of a lower rate.

So for a home that you purchased for $160,000 with intention of it being an investment, may have only been worth $100,000 in 2006. If you still had a mortgage balance of $120,000, you had 120% LTV, way above the bank’s requirement. Therefore, your bank would require you to take out PMI and by the time you figured that cost into the equation, the whole benefit of lowering your interest rates to lower your house payment would be gone.

It made refinancing illogical, if not impossible.

How can a HARP Refinance Benefit you?

So where does the HARP refinance come into the picture? HARP aka Home Affordable Refinance Program and is a program established by the US Federal government in March 2009. A product from Federal Finance Agency to assist homeowners that are underwater or almost underwater with their mortgages, ie, owe more than it’s worth but are current with their payments, yet still not able to refinance because of owing more on their home than it’s worth.

The HARP Refinance – Rules and Guidelines

The rules have change a few times since it’s inception, but at this time, you may have any amount of negative equity in a 30 year mortgage and be eligible now. This even covers homeowners that have a PMI. However, lenders were leery to take on this type of loan because of any fraud activity by the previous lender. One of the rule changes now clears them of having that responsibility, which gave lenders a relief and HARP doors began to open up for homeowners looking for refinance possibilities.

Browse F.A.Q. Topics

Appraisal

  • Why is there no appriasal needed with HARP?

    Loan will be ran through an automated underwriting systems that determines the estimated value is acceptable and waive the appraisal. However, the AUS does not allow contest of the value nor can improvements been submitted. The homeowner has a right to request an appraisal if they do not want to use the AUS.

Freddie Mac

  • How does a HARP refinance work with a Freddie Mac loan?

    Freddie Mac funded loans can be refinanced in one of two ways

    1. Refinance through current lender if they are working with HARP 2, if they don’t

    2. Refinance through different lender that is working with HARP 2

Guidelines

  • How many times can you refinance under HARP?

    Generally once, BUT…

    If you had a Fannie Mae funded loan between March 2009 and May 2009 that was refinanced under HARP, you may be eligible to refinance again

  • Do I qualify for the HARP refinance Program?

    If you meet the following criteria, this is the first step in determining your eligibility:

    1.  Loan-To-Value must be at least 80% or more
    2. Mortgage must be in placed with Fannie Mae or Freddie Mac by June 1, 2009
    3. Only one late payment within last 12 months
  • What are the FHA Short Refinance Guidelines?

    The FHA short refinance option is a refinancing plan for non-FHA loans and the homeowners are current on their payments. This is different that the HARP or HARP 2 programs with the following:

    •  The homeowner must owe more than the home is worth
    • FHA insured loans are NOT eligible
    • FHA mortgagees can not make mortgage payments for the borrowers
    • FHA motgagee can bring loan current to be eligible for FHA insurance
  • How does a HARP refinance work with a Freddie Mac loan?

    Freddie Mac funded loans can be refinanced in one of two ways

    1. Refinance through current lender if they are working with HARP 2, if they don’t

    2. Refinance through different lender that is working with HARP 2

  • Why is there no appriasal needed with HARP?

    Loan will be ran through an automated underwriting systems that determines the estimated value is acceptable and waive the appraisal. However, the AUS does not allow contest of the value nor can improvements been submitted. The homeowner has a right to request an appraisal if they do not want to use the AUS.

  • Can I refinance my 2nd mortgage with HARP?

    The lender on your second mortgage must agree to be secondary to the new first mortgage. By HARP’s guidelines, you can not combine first and second mortgage in a single loan. However, if there is equity, a regular refinance may be possible with the usual appraisal and income verification.

HARP

  • What is HARP mortgage refinancing?

    HARP is a program rolled out by the FHA to assist homeowners that are upside or underwater on their mortgage.

  • How do I apply for a HARP refinance?

    Fill out our contact for or call us directly to see if you qualify.   You can also contact your current lender directly.

  • How many times can you refinance under HARP?

    Generally once, BUT…

    If you had a Fannie Mae funded loan between March 2009 and May 2009 that was refinanced under HARP, you may be eligible to refinance again

  • Do I qualify for the HARP refinance Program?

    If you meet the following criteria, this is the first step in determining your eligibility:

    1.  Loan-To-Value must be at least 80% or more
    2. Mortgage must be in placed with Fannie Mae or Freddie Mac by June 1, 2009
    3. Only one late payment within last 12 months
  • Can you refinance under HARP more than once?

    Yes but no, it depends. Quote from the U.S. Treasury: “The mortgage CANNOT have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March to May 2009.”

  • How long does a HARP 2.0 refinance take?

    Since there are more stipulations to this program, the HARP can take a little longer than the HARP 2 with the average 75 to 90 days.

  • How long does a HARP Refinance Take?

    This can depend on how backed up your lender is with processing HARP 2 applications, but the average is 45 to 75 days. Some have taken as long as 6 months.

  • How does a HARP refinance work with a Freddie Mac loan?

    Freddie Mac funded loans can be refinanced in one of two ways

    1. Refinance through current lender if they are working with HARP 2, if they don’t

    2. Refinance through different lender that is working with HARP 2

  • Why is there no appriasal needed with HARP?

    Loan will be ran through an automated underwriting systems that determines the estimated value is acceptable and waive the appraisal. However, the AUS does not allow contest of the value nor can improvements been submitted. The homeowner has a right to request an appraisal if they do not want to use the AUS.

  • Can I refinance my 2nd mortgage with HARP?

    The lender on your second mortgage must agree to be secondary to the new first mortgage. By HARP’s guidelines, you can not combine first and second mortgage in a single loan. However, if there is equity, a regular refinance may be possible with the usual appraisal and income verification.

  • Are HARP Refinance rates Higher?

    For the most part, no. However, while they homeowner may get a lower interest rate that saves them monthly with lower payment, they will inccur closing cost and may not realize that savings for as long as 3 years.

  • What is needed for HARP Eligibility?

    LTV can not be any less than 80% -no cap on maximum

    Fannie Mae or Freddie Mac must have loan in place before May 31, 2009

    One late payment in 12 months with no late payment last 6 months

  • What are the HARP refinance Requirements?

    Loan-To-Value must be at least 80% or more

    Mortgage must be in placed with Fannie Mae or Freddie Mac by June 1, 2009

    Only one late payment within last 12 months

  • What are the HARP refinance rules?

    Fannie Mae or Freddie Mac must own your mortgage before May 31, 2009

    Must be current on mortgage and no late payment wthin last 6 months

    No more than one late payment in 12 months

    Must have a miniumn 80% LTV

     

    To name a few.  Contact us for more info

  • What is a HARP refinance?

    HARP is designed to assist homeowners that are upside down in their mortgage, get an affordable, new, stable mortgage with lower interest rate that lowers their monthly payment

Rates

  • Are HARP Refinance rates Higher?

    For the most part, no. However, while they homeowner may get a lower interest rate that saves them monthly with lower payment, they will inccur closing cost and may not realize that savings for as long as 3 years.

Short Refinance

  • What are the FHA Short Refinance Guidelines?

    The FHA short refinance option is a refinancing plan for non-FHA loans and the homeowners are current on their payments. This is different that the HARP or HARP 2 programs with the following:

    •  The homeowner must owe more than the home is worth
    • FHA insured loans are NOT eligible
    • FHA mortgagees can not make mortgage payments for the borrowers
    • FHA motgagee can bring loan current to be eligible for FHA insurance