Home Affordable Refinance Program (HARP) is a mortgage-refinancing program offered to homeowners by the Federal Housing Agency. It is specifically offered to homeowners who have homes that are worth less than the outstanding balance on the home loan. It was created in 2009 to deal with the housing downturn.

This refinancing program is beneficial for those homeowners who are struggling to pay a mortgage due to their unexpected financial hardships. An applicant should consider refinancing their loan through HARP only if they have a good payment history that did not incur any extra interest due to overdue payments and if they owe more than what their house is worth.

Some advantages of refinancing your home loan through HARP are mentioned below:

• HARP lowers the mortgage rate incurred against a home loan
• It helps in shortening the loan term
• You can also transfer it to an adjustable-rate mortgage in a fixed-rate loan to reduce the mortgage rate and shorten the loan term
• HARP also helps in bundling closing costs into a new home loan
• You have to do minimum paperwork when compared with a traditional refinancing option. This makes the application process easier and smoother
• There is no minimum score required to qualify for a HARP loan
• You also don’t require to get an appraisal or have a loan underwriting from your previous lender, making refinancing process easier and faster
• It does not have underwater limits, which increases your chances of getting your loan refinanced through HARP

Following are the eligibility requirements to qualify for HARP:

• The applicant should be on the current mortgage and should not have more than one instance of late payment in an entire year
• The home that the applicant is applying to refinance through HARP should be their primary residence, a single-unit second home or an investment property
• The previous loan that the applicant is planning to refinance should be owned by Freddie Mac or Fannie Mae. It should be originated on or before May 31, 2009
• The current loan-to-value (LTV) ratio must be greater than 80 percent, which is the lending risk assessment ratio used by financial institutions and lenders before they can approve a mortgage

There are tools to calculate your LTV and refinancing options through HARP’s loan look-up tools available on their official website.

Although you cannot enroll in refinancing your home loan through HARP more than once, they have rehashed their eligibility criteria, which might increase your chances to get a refinancing program through the same.

If your home has a little equity, or if you owe more mortgage than your what home is worth, then it can be difficult for you to find a lender to refinance. HARP can be a one-stop solution for borrowers who have never made late payments against their mortgages and have loans owned by Freddie Mac and Fannie.

Home Affordable Refinance Program (HARP) was introduced in 2009 by the Federal Housing Finance Agency as a part of making homeownership affordable. It was introduced in 2009, and it enables borrowers with little or no equity to refinance into mortgages that are more affordable and do not require additional mortgage insurance.

HARP specifically targets borrowers who have a loan-to-value ratio that is less than or equal to 80 percent, and those who have limited or no delinquencies over a period of the year prior to refinancing. There are significant changes made to the program since it was first introduced. The requirements for property appraisal were waived under certain circumstances and risk fees for borrowers who selected shorter amortization, i.e., spreading payments over multiple periods, were eliminated.

Without requiring a minimum credit score, HARP lets you acquire mortgages with very low interest rates and change from adjustable to fixed-rate mortgages.

Once you qualify to refinance your home loan through HARP, you will go through a series of applications approval and closing process on your current mortgage. Outlined below are steps that will help you determine if the refinance program meets your specific needs. Here are steps to get started.

Step 1
Gather all your financial information such as mortgage statements such as second mortgage and your income details.

Step 2
Once you have gathered all your financial documentation, contact your mortgage company to check whether they have an approved HARP lender. Your lender might already have your loan file since you are their current customer. However, you might be asked to provide necessary information to verify the current source of income.

Once you have gathered all the information from your mortgage company, contact a HARP lender. You will find a list of approved HARP lenders on the official website. These lenders will help you determine if you are eligible for HARP.

Step 3
Once you have been approved, go through the application and closing process.

If a lender says you are not eligible for a refinance, contact a HARP specialist to find other ways that can make you eligible for a HARP refinance program.