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Loan Modification Under the HARP Program
Frequently Asked Questions, Part I Image thanks to floridamortgagecorp.com
What Does Refinancing Mean Under the HARP Program? Refinancing,under the Home Affordable Refinance Program (HARP), means getting a new loan to replace your existing loan. The major feature of the refinancing element is to allow the loan amount to exceed 80% but not more than 125% of your home's value. Previously no new loan could be written that was higher than 80%, with the drop in housing prices this change should enable many to take advantage of the current low mortgage interest rates. I am Underwater. I Owe More Than My House Is Worth. Will A Mortgage Refinance Under HARP Reduce What I Owe? No. The objective of a refinance under HARP is to help homeowners get into more stable or more affordable loans. Refinancing will not reduce the principal amount you owe to the first lien mortgage holder or any other debt you owe. How Do I Know If I Qualify For A Payment Reduction Under The Plan? In order to qualify for the Home Affordable Refinance Program (HARP), you must be able to show the following:
Are There Any Other Qualifications? Yes. Under the U.S. Government plan you must also:
Final eligibility will be determined by your mortgage lender. Why Should I Act Now? Is There a Time Limit? YES! The HARP program expires on June 10, 2011. Your refinance under HARP must have a new mortgage note date on or before that date. What if I don't qualify under a U.S. Government Plan? Can I still apply for loand modification? Yes. Depending on your lender, especially if it is a bank, it will likely have other options if you don't qualify under HARP or HAMP. Will a HARP Refinance Lower My Monthly Payments? Yes. The plan centers on the belief that struggling borrowers will stay in their homes - even as values decline sharply - as long as they can make their monthly payments. Homeowners whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Homeowners who are paying interest only, who have a low introductory rate that will increase in the future, or who face a balloon payment may not see their current payment go down if they refinance to a fixed rate and payment. These homeowners, however, could save a great deal of money by reducing the amount of interest you pay over the life of the loan. For the rest of this article please go to Loan Modification Under the HARP Program, Part II
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