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HARP Loan Program

Written By: admin - Feb• 13•13

Details About The HARP Loan Program

The HARP Loan Program (also known as Home Affordable Refinance Program) was created early in 2009 to assist people that were underwater on their mortgage adjustments.

Pop! Goes the bubble!

Nothing lasts forever. And when the housing market bubble burst in 2006, people who were trying to utilize interest only ARM loans in attempt to ride the wave of real estate appreciation got some very bad news. As interest rates adjusted upward, many found themselves not able to pay for their mortgage any longer.

Of course, not only those who had ARMs were effected. Housing prices everywhere sank almost overnight when the bubble burst. And many people, especially those that had recently purchased a home, found themselves owing more on their house than what it was worth.

How to qualify for HARP:

The program has changed several times since it’s debut. However, most of these changes were to make it easier for people to get into the program.

  • Either Freddie Mac or Fannie Mae must currently own or guarantee the mortgage in question.
  • Either one of the agencies had to have taken on the mortgage before the end of May, 2009.
  • The current owner must not have had a HARP refi of the mortgage prior.
  • The owner has to have a good payment history, and be current on the loan in question.
  • The LTV has to be greater than 80%.
  • The owner must be getting either a smaller monthly payment, or a less risky amortization (e.g. out of an ARM and into a standard 30 year loan).

What type of homes is it for?

The program is allowed to be used for not only primary residences, but also vacation homes, rental houses, etc. However, it must be noted that if the loan isn’t for a home that one will be living in primarily, the interest rates are higher.

Further benefits of the program

The 3rd revision of the program now allows homeowners that don’t have a Fannie or Freddie mortgages. This includes basically all acquisition types as well, not leaving out stated income loan originations, stated assset loans, etc.

Also, if an automated (usually computer generated) version of the appraisal is available in your area, you don’t have to wait to get a standard appraisal before your mortgage can be modified.

The program and all of the benefits listed above, end on the last day of December, 2013. So, if you’re interested in taking advantage of any or all of the perks HARP has to offer, you had better do it soon. Who knows when or even if we’ll ever see a break like this again. Good luck!

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