How To Refinance If You Are Underwater

Few people know about the HARP program – the Home Affordable Refinance Program. HARP was enacted over the past couple of years to provide a way for upside-down homeowners to refinance their mortgage. Upside-down means that you owe more on your mortgage than your home is worth. In normal housing market circumstances, most people have some equity in their homes which can allow them to refinance as long as the homeowner meets whatever loan program they are looking to get into. But, since about 2008, many homeowners have had their equity worn away by the deteriorating housing market such that many homeowners have either no equity or even negative equity thus preventing them from an opportunity to refinance under normal loan guidelines.

With this as the case, HARP was enacted by the US federal government to provide a refinancing program allowing some upside-down homeowners an opportunity to refinance their mortgage. Unfortunately, if you have a VA loan and want to take advantage of the streamline low VA rates or a FHA loan and their low rates you will not be able to use the HARP program for your refinance. The HARP is only for those homeowners with a Fannie Mae or Freddie Mac insured/backed mortgage. Below you will find some additional requirements of HARP to help you determine whether you qualify.

  • You must have not missed or been more than 30 days late with your mortgage payment over the past 12 months.
  • You must be current with your mortgage payment.
  • Using the HARP program must put you in a better more stable financial situation like lowering your monthly payment or converting a more risky adjustable rate mortgage or an interest only mortgage into a fixed rate mortgage.
  • You must have no equity in your home and not have your mortgage balance be more than 125% of the value of your home.
  • You must have sufficient income and proof of the financial means to repay your new mortgage payment

With these simple requirements in mind, you may or may not think that you can qualify for HARP. The best advice is the call a mortgage lender to find out. You can call your current mortgage company first and then call a few other companies to see what kind of answers you get. seo competition discovery . You ought to call several companies anyway to give you a range of offers to compare. At the very least, you’ll know where you stand with a refinance if you are upsidedown.