The government’s Home Affordable Refinance Program (HARP) has helped millions of homeowners save hundreds of dollars a month on their mortgage payments, and it might help you, too — even if you owe more on your loan than your home is worth.
Announced in 2009, HARP has undergone significant changes enabling more homeowners to refinance. But those changes may also have caused confusion. Am I too underwater? What’s different about HARP? Does my current mortgage company have to refinance my loan?
Here are the answers to seven commonly asked questions about HARP. What’s most important is that if you think you might qualify for this program, contact your mortgage company to find out.
1. What enhancements were made to HARP that may make me eligible now?
HARP underwent significant changes, but the primary enhancement removed the limit on the amount that homeowners could be underwater (owe more on their mortgages than their homes are worth). With that change, many homeowners who were not eligible now may qualify. Other changes made it easier for homeowners to refinance under HARP using the HARP lender of their choice.
2. What if I have an adjustable-rate mortgage (ARM)?
HARP can be an advantage because it allows you to replace your adjustable-rate mortgage with a more stable fixed-rate mortgage. For borrowers coming up on a payment reset, refinancing now with HARP may be a benefit because you can lock into a low fixed-rate now — before rates may go higher.
3. Is HARP the only refinance program available?
HARP is one of several refinancing options available to eligible homeowners. But HARP is unique — it’s the only widely available refinance program that enables eligible borrowers with little to no equity in their homes to take advantage of low interest rates and other refinancing benefits.
4. How can I find out whether my loan is owned by Fannie Mae or Freddie Mac?
You can confirm whether your mortgage is owned by either Fannie Mae or Freddie Mac by checking the following websites:
For Fannie Mae: http://knowyouroptions.com/loanlookup
For Freddie Mac: http://freddiemac.com/mymortgage
Only mortgages owned or guaranteed by either Fannie Mae or Freddie Mac are eligible for refinance under HARP.
5. If I complete a HARP refinance can I add or remove someone from the loan?
Yes, with a HARP refinance you can add or delete co-borrowers as long as one of the original borrowers remains on the loan.
6. If I owe more on my home than it’s worth, will I have to make a down payment before I can refinance?
No, you won’t need to pay more money down on your mortgage in order to refinance with HARP; in fact, most lenders will allow you to roll in your closing costs, so you have no out-of-pocket expense. But depending on which lender you work with, you may need to pay closing costs.
7. Do I have to refinance for another 30 years?
No. Shorter loan terms (15 years and 20 years) may be available for qualified borrowers, so you can start paying down your mortgage quicker and building equity faster.
Take the 30-second HARP quiz to find out whether you might qualify. There’s nothing to lose, and you could save hundreds of dollars every month.
When you’re ready to find out if HARP’s right for you, contact your current mortgage company (the company listed on your monthly mortgage statement). If your current mortgage company is unable to help you, visit HARP.gov or KnowYourOptions.com/harp for a searchable list of HARP lenders to find one in your area. Any participating HARP lender can refinance eligible loans.