At first, you might mistake it for a large, stringed musical instrument. It’s not, but the Home Affordable Refinance Program (HARP 2.0) could be music to your ears if your home mortgage is still underwater.
First announced in March 2009, the federal government program designed HARP to help underwater or near-underwater homeowners refinance into a fixed loan with a lower monthly payment.
The first HARP was not that successful. It was difficult to qualify to refinance under the terms of the program and contained too many roadblocks for the typical homeowner who needed the service so badly.
The program was revised in 2011 to be much more successful and available to many more needy homeowners.
Basically, here are the ways that HARP 2.0 improved the program:
No underwater limits. Homeowners can refinance under HARP 2.0 no matter how far their home values have fallen. The old 125 percent limit no longer applies.
No more appraisals. Generally, most homeowners will not have to get an appraisal to get their loans underwritten at a lower rate of interest. Taking that big hurdle out of the equation simplifies and speeds the process.
Modification fees. The long list of fees has been shortened and even eliminated in some cases. This too, makes refinancing more feasible for more people.
HARP 2.0 will expire. The program is set to expire on Dec. 31, 2013. Check the calendar, because that’s not far away.
Fannie Mae or Freddie Mac must be involved. To be eligible for the HARP program, your mortgage must be held by either Fannie Mae or Freddie Mac. If you don’t know, go to FannieMae.com and FreddieMac.com to “look up” your mortgage.
So, do you qualify for a HARP 2.0 refinance? You may if you fit these criteria:
Your mortgage was sold to Fannie Mae or Freddie Mac before June 1, 2009.
You are current on the mortgage and have had no late payments in the last six months. A late payment is defined as one that’s more than 30 days overdue.
You have not had more than one late payment in the past 12 months.
This must be your first refinance through HARP. If you have refinanced under an earlier version of HARP, then you do not qualify.
If you believe you might qualify, start calling. Or go to Freddiemac.com to find a list of participating lenders. If the first one turns you down, don’t get discouraged. Call another lender and even another until you find one that will work with you to get your mortgaged refinanced.
No matter the time and effort required, it will be well worth it if you can refinance your mortgage into a lower rate of interest.
For more information and details on the HARP 2.0 program, go to MakingHomeAffordable.gov.
Mary Hunt is the founder of www.DebtProofLiving.com, a personal finance member website. You can email her at firstname.lastname@example.org, or write to Everyday Cheapskate, P.O. Box 2099, Cypress, CA 90630. To find out more about Mary Hunt and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.