Terri Hanson, Vice President—Residential Lending
The Home Affordable Refinance Program (HARP) may be easy to brush off, given all the flashing Internet ads that use it as clickbait. But, HARP is a real government program. Better yet, it can result in lower monthly payments—and/or a shorter maturity—for those who qualify.
Don’t Assume This Doesn’t Apply to You
If your current conventional mortgage closed prior to May 29, 2009, and is held by either Fannie Mae or Freddie Mac, it pays to see if you qualify for this program. If you checked several years ago, it’s time to check again. The restrictions on HARP loans have changed since the program was first introduced.
To find out the closing date of your loan and to verify which agency holds it, you can use the Loan Lookup tool. Or, you can just call us. We’re happy to look it up for you, whether you originated your current mortgage with us or not.
In addition to the loan date and holder criteria, you qualify for HARP if the following statements are also true:
- Your home is your primary residence, a second home or an investment property.
- Your home value has declined, and your loan-to-market value is greater than 80 percent.
- You’ve had no late payments in the last six months and no more than one late payment in the six months prior to that.
Qualification is the first step, and determining if it makes dollar sense is the next. That’s also something we can help you with. We’ll do the calculation to make sure that after factoring in closing costs, HARP offers a sufficient benefit. We’ll also check to see if there are other programs available that might be better for your situation.
Five Reasons to Refinance Under HARP Now
If you are weighing the hassle of refinancing with just staying with the mortgage you have, here are five reasons why you should take action, now.
- Interest rates have fallen since May 29, 2009, which may mean you can refinance at a lower rate and reduce your monthly payments. Remember, even if your mortgage is at a 4 percent level now, with rates currently in the 3 percent area, that could significantly reduce your interest costs over the life of your loan.
- Refinancings don’t have to be apples to apples. If you are currently in an adjustable-rate mortgage (ARM) and want to refinance into a 30-year mortgage under this program, you have that option. You can even switch from a 30-year term to a 15-year term. Changing the term may also lower your payment or help you pay the mortgage off sooner.
- The program is very forgiving of changed circumstances. If your income is lower than it was when you borrowed, your credit score has fallen, you no longer have any equity in your home, or even if you’ve declared bankruptcy, you may still be able to reduce your monthly payments under this program.
- PMI won’t be triggered by a HARP refinancing, even if your current loan-to-value ratio is below 20 percent. If you don’t have to pay PMI currently, you won’t have to under a new HARP mortgage.
- The window of opportunity is closing. HARP ends December 31, 2016, and this time it is not going to be extended.
For more information about HARP online or on any of the other types of home loans we offer, click here. To have us determine your qualification and to discuss which financing structure is right for your situation, contact us at 630-466-4843 or email email@example.com. We can’t wait to talk to you about what we can do for you today.