The Home Affordable Refinance Program (HARP) is a US federal program established by the Federal Housing Financing Agency in March 2009 to help home and underwater homeowners refinance their mortgage. Can a HARP loan be refinanced?
Am I eligible for HARP?
The HARP loan looks like any other mortgage. Because HARP mortgages are supported by Fannie Mae and Freddie Mac, the underwriting process will be similar to any other traditional mortgage. Information on loans to be signed and financial documents to be disclosed will be disclosed. Mortgage lenders are looking for borrowers with solid income, good assets and good credit quality.
5 ways to prepare for HARP refinancing
After determining that you qualify for HARP, it’s time to start preparing your finances. Here are five ways to prepare for HARP refinancing:
- Make sure Fannie or Freddie support your mortgage
Fannie Mae and Freddie Mac have a loan search tool that allows homeowners to search for loans.
- Check if your mortgage is old enough
Only those whose mortgage loans were securitized before June 1, 2009 can apply for HARP. Basically, this means that the mortgage began in mid-May 2009 or earlier.
- Does your mortgage have mortgage insurance?
HARP was designed to help homeowners with or without private mortgage insurance (PMI) and lender paid mortgage insurance (LPMI).
- You must be current
HARP requires that all homeowners make their last six mortgage payments on time, with a maximum of one 30-day delay in the last year. This information is verified based on the credit report, so read the credit reports before submitting your HARP application.
- Organize your HARP documents
Because HARP mortgages are guaranteed, like any other type of mortgage, you will need to provide bank statements, driving license, home insurance information, payslips and W-2.
Life after HARP
When HARP began to relax, both Fannie Mae and Freddie Mac introduced high LTV programs for vulnerable homeowners.
LTV Fannie Mae refinancing option
Homeowners with existing Fannie Mae mortgages may be eligible for high LTV refinancing. There is no maximum LTV for people with a fixed rate mortgage, while floating rate mortgages are eligible for a maximum of 105% LTV. The refinancing option must result in at least one of the following:
- Lower repayment of principal and interest
- Interest rate drop
- Shorter depreciation
- A change in a stable mortgage product
- Mortgage payments must be up-to-date, with no payment delays in the last six months. The program allows only one late payment in the last 12 months.