The ins and Outs of the HARP loan program

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You have probably heard that purchasing a home is one of the best investments you’ll ever make. Under ideal circumstances, every homeowner could build handsome equity in his or her home. After several years, you could be sitting on tens of thousands of dollars, or more, of cash to be used for home improvements, paying off debt or put toward retirement. It’s a good feeling to have a home with equity. However, financial conditions and other factors aren’t always in the homeowner’s favor. Economic downturns and problems in the housing market can cause steep declines in home values, not only eating away at your precious equity but also putting you underwater, a term meaning that you owe more on your home than it’s currently worth. This can be a paralyzing, helpless feeling. However, with the HARP loan program, there is relief in sight for homeowners. If you find yourself swimming upstream in the world of mortgage equity it’s time to check out this program.

Help for Those With no Equity

 In the toughest of times in the housing market, home values decline. This might be good news for someone looking to purchase their first home, but for the existing homeowner, this can be devastating. Fortunately, with the Home Affordable Refinance Program, underwater or near-underwater homes can be salvaged. These loans allow you to refinance to a more favorable structure and rate so you can come up to more even levels with equity. In these circumstances, other loans won’t allow you to refinance, but with HARP home loans, you can.

The Criteria

 Qualifying for the HARP loan program isn’t automatic if your home is underwater; there are certain guidelines you must meet in order to take advantage of this opportunity. The following is a list of important factors to consider if you are interested in this program.

  1. Keep Your Mortgage Current. If you’ve had any payments that have been more than 30 days later in the past six months or more than one in the past 12 months, you can’t qualify for this program.
  2. Must be Freddie Mac or Fannie Mae. In order for this program to work for you, your home loan must be guaranteed by either Freddie Mac or Fannie Mae, and the loan must have been acquired on or before May 31, 2009.
  3. Loan-to-Value Ratio Restrictions. Your loan-to-value ratio must be greater than 80 percent in order for you to qualify for the HARP loan program. Again, this program is geared specifically for people whose homes have lost value due to economic issues.
  4. Can’t Have Previous HARP Loans. This program is designed for homeowners to use only once. The only exception to this rule is that you could have refinanced with HARP on a Fannie Mae home from March through May of 2009.

There is hope available for the struggling homeowner whose home has been the unfortunate casualty of losses of equity. Try the HARP loan program and get the peace of mind in knowing that you can restore you loan-to-value ratio once again.

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