HARPs New Guidelines for Homeowners to Refinance

Good news for homeowners from the federal government! The Home Affordable Refinance Program (HARP) has recently changed its guidelines to allow homeowners to refinance at today's lower mortgage rates even if their homes have declined in value. Depending on the loan they choose, homeowners can now refinance without LTV limits. This will help them to improve cash flow to pay off their mortgages easier and, hopefully, not be hesitant to become a homebuyer again in the future. HARP works with primary residences, second homes and investment properties.

HARP was established in 2009 to help homeowners with good payment history to refinance into more affordable mortgages despite declining home values. Originially, HARP capped LTVs at 125 percent for fixed rate loans, and 105 percent for adjustable rate loans. It maintains its ARM cap, but now there is not a limit for the LTV for a fixed rate mortgage of 30 years or less. However, if the loan is for more than 30 and up to 40 years, it is still capped at 105 percent.

This is very good news for those who are in states that were hit hardest by declining home values such as Arizona, California, Nevada and Florida. Mortgage rates are at the lowest levels in decades. Now is an opportune time for homeowners to take advantage of HARPs new policy and reduce their interest rate and monthly payments. They could then pay off their loans faster due to shortening the loan terms. This could lead to them making more real estate investments in the future as well.

To qualify for HARP, the property cannot have been refinanced by HARP before. The loan needs to have been originated before May 31st 2009 and be associated with Fannie Mae or Freddie Mac. No private mortgage insurance is required if it wasn't needed for the original loan and income documentation is not necessary. The amount of the loan just can't exceed the conforming loan limits for the property's location. The loan must be current and the borrower cannot have made late payments in the last six months, and no more than one late payment in the last 12 months.

If you feel as though you are drowning in the stress of being behind on your mortgage, HARP urges you to take advantage of this once-in-a-lifetime opportunity while you can! HARP wants to help bring you back into the home buying market with these low rates. Look into it today!

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