How Do Homeowners Qualify for a HARP Loan?

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Learn how to qualify for the Home Affordable Refinance Program.

Homeowners who want to refinance their mortgage might want to consider the Home Affordable Refinance Program. If qualified, this program lets homeowners take advantage of low refinance rates before interest rates rise. Be sure to take the time to find the best mortgage lenders who will help obtain the most favorable terms and rates available for the mortgage loan.

What Is HARP?

The HARP program is designed to help homeowners who owe too much on their mortgage to qualify for a traditional refinance loan. With HARP, homeowners can refinance from a variable interest rate to a fixed rate and avoid paying for private mortgage insurance.

In order to help more people, original HARP regulations were expanded to create HARP 2.0, which allows homeowners to take advantage of HARP refinance rates even if they are underwater on their mortgage. Additionally, many homeowners will not be required to have an appraisal on their loan. Apply to take advantage of HARP loan rates now, since the program deadline is September 1, 2017. Some advantages of HARP include:

  • Lowering the monthly payment
  • Shortening the term of the loan
  • Reducing the interest rate
  • Locking in a fixed-rate mortgage

What Are HARP Loan Qualifications?

There are basic guidelines to qualify for a HARP refinance. Guidelines are designed to help homeowners who would benefit the most from refinancing. If qualified, they will be able to take advantage of HARP refinance rates on your mortgage. Basic qualifications include:

  • The loan was taken out before May 31, 2009.
  • The loan must be owned by Fannie Mae or Freddy Mac.
  • The home is a primary residence, a one-, two-, three- or four-unit investment property or a one-unit second home.
  • The loan to value — or LTV — rate is more than 80 percent.
  • Your mortgage is current with no late payments of 30 days or more in the last six months and no more than one late payment in the last 12 months.

What If They Do Not Meet HARP Loan Requirements?

If they do not meet HARP loan requirements, they may still be able to refinance your mortgage. It is important to be current on their loan to qualify for refinancing. Homeowners will need to apply for a mortgage refinance similar to the way they applied for theiroriginal mortgage loan. One option is to contact their bank or a mortgage broker to find a new mortgage. Be prepared to pay the closing costs associated with a refinance, which can include an appraisal, application fee, inspection fee and attorney fees. Homeowners may still have to pay MI if you owe more than 80 percent of their home’s value.

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