HARP Is Here!

As we have seen consistently low rates in the early part of 2009, many homeowners have been trying to refinance.  However, the softening market, specifically falling home values, have made it increasingly difficult for many.  In an effort to help, President Obama announced a new loan program which is intended to help this growing section of the population.  The Home Affordability Refinance Program, or HARP, is part of a larger initiative referred to by the government as Homeowner Affordability and Stability Plan. 

The first step in determining if you are eligible for help under the HARP program is to figure out who backs your loan, Fannie Mae or Freddie Mac.  Each company has their own website, www.fanniemae.com and www.freediemac.com, which have search engines to help you determine who backs your loan.  The sites are a little different, but both are easy to use and informational.

Once you’ve determined who owns your loan, a mortgage professional can help you determine how exactly you may benefit from refinancing, but the key elements of the program are:

• Loan to value ratios allowed up to 105% and an unlimited combined loan to value ratio is allowed.  If your home was worth $200,000, appraised value, you could borrower up to $210,000 on a first lien; a second mortgage would need to be subordinated and would still require a monthly payment.
• No mortgage insurance is required if you currently don’t pay mortgage insurance
• No appraisal required in many cases

The HARP program is still new and there is talk of expanding the program to address loans with mortgage insurance in the near future, but currently if you’re a homeowner who has suffered equity loss or has a first and second mortgage, you may be eligible for help.  Visit the government’s website, www.makinghomeaffordable.gov to learn more details about how you may benefit or call us and we can help determine if you qualify.

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