Home Affordable Refinance Program
When you owe more on your mortgage than your home is worth, it can be difficult to find a lender willing to help you refinance. But for borrowers who have remained current on their mortgages, there is hope. It’s called the Home Affordable Refinance Program (HARP).
Introduced in March 2009, HARP enables borrowers with little or no equity to refinance into more affordable mortgages without new or additional mortgage insurance. HARP targets borrowers with loan-to-value (LTV) ratios equal to or greater than 80 percent and who have limited delinquencies over the 12 months prior to refinancing. Your loan must be owned by Fannie Mae or Freddie Mac, which own most of the loans in the U.S.
According to the Federal Housing Finance Authority, more than 3.3 million Americans have refinanced through HARP, and they estimate that another 367,000 homeowners are eligible at this time.
Through HARP, you can get a lower interest rate (which means less out-of-pocket costs each month), get a shorter loan term, or change from an adjustable to fixed-rate mortgage. No minimum credit score is required.
For many borrowers the advantages are huge:
- Securing a fixed-rate mortgage that won’t change over time
- Building equity faster, with a shorter term
- Lower closing costs because an appraisal is not usually required
The HARP Program has been extended until December 31, 2018, so there is still time to take advantage of this program. With mortgage rates continuing to remain at historically low levels, you might want to consider HARP. In 2014, the average HARP borrower reduced their monthly payment by $179. That can really add up!
Holyoke Credit Union also partners with GreenPath, a free financial counseling service for our members that can help explain the HARP eligibility guidelines. For more information, call GreenPath Housing at (877) 337-3399 or log on to www.greenpathref.com and look under “Housing Counseling Services”.