photo: Tattooed JJ via Flickr
Is HARP for you?
Not the beer, though it’s yummy. I’m talking about the “Home Affordable Refinance Program” which is designed for those who are current in their mortgage payments, but underwater in their home value and therefore unable to re-finance their mortgage to take advantage of today’s lower interest rates.
First of all, if you are current in your mortgage and not in danger of foreclosure, congratulations. You have managed to avoid one of the greatest causes of stress, anxiety and late night tears for you fellow Americans.
HARP is set to expire in June of 2010, so if you qualify, and if you want to refi, you’d better get crackin’.
How do you know if you qualify?
After you finish reading this piece, trot over to www.makinghomeaffordable.gov to get additional resources.
But for now, let’s see about the basics:
1) You must be current in your mortgage payments;
2) Must have the ability to pay the new mortgage payment amount;
3) Your mortgage must owned or guaranteed by Fannie Mae or Freddie Mac (which eliminates a lot of folks, sorry);
4) The principle amount of your first mortgage cannot be more than 125% of your home’s current value (this may also eliminate a lot of you who need help most);
5) The refi must improve either the affordability or sustainability of you mortgage situation (by sustainability they mean getting you out of fluctuating interest rates).
HARP refi’s differ from bank refi’s in an number of ways.
a) You can refi for more than you house is worth, up to 125% of the value of the house;
b) There are relaxed credit score requirements;
c) They base the loan to value (LTV) analysis only on your first mortgage instead of all debt against the house;
d) You cannot use this refi to do debt consolidation (no lumping in your credit card debt).
I don’t know how many of you out there fall into the narrow combination of circumstances that this Venn diagram of conditions imposes, but if you do, and you have either a high interest rate loan or an adjustable rate loan and would like to take advantage of the current market and get into a low fixed rate loan, HARP might be for you.
So get busy; if you qualify and if HARP is advantageous to you, there’s only a few months left to take advantage of this program.
Update, thanks to JediMom inthe comments:
Federal Housing Finance Agency (FHFA) acting director Ed DeMarco today announced the extension of the Home Affordable Refinance Program, (HARP) for an extra 12 months, until June 30, 2011.
Tags: Fannie Mae, Freddie Mac, HARP, home ownership, mortgage, refinancing
