HARP Mortgage Loan: All You Need To Know

HARP mortgage loan

For homeowners who are struggling to pay their home mortgages, help is out there. There are many programs available that can refinance their home loans to help reduce high payments. Homeowners with HARP mortgage loan from either Freddie Mac or Fannie Mae often qualify for a program called the Home Affordable Refinance Program (HARP).

There are a few necessary qualifications to get started on a HARP mortgage loan. The loan must be from Freddie Mac or their sister company Sallie Mae. Also, applicants must have paid their mortgage payments on time for at least the last year. An 80% or above loan to value ratio is needed, and it has to be a loan that either Freddie Mac or Fannie Mae purchased before the year 2009. If the home was refinanced before, the loan has to have been refinanced only through Fannie Mae through the Home Affordable Refinance Program for a period of time in 2009.

Not all mortgage lenders participate in the HARP mortgage loan program, so those interested should check with their lenders first. Loans are sometimes sold, so they must be verified that they are definitely owned by either Freddie Mac or Fannie Mae online with a free look-up tool that is available on their websites. There are many mortgage refinancing companies available. It is best to compare the rates of several of them with the rate that would be received through the HARP mortgage loan program, to see which one is the most affordable and has the best terms to fit budgets.

What Were the HARP Mortgage Loan Eligibility Criteria?

To be eligible for HARP, homeowners have to meet the following requirements:

  • A mortgage owned or guaranteed by Freddie Mac or Fannie Mae that was closed on or before May 31, 2009, was a fundamental need.
  • The LTV percentage on the initial loan must have been at least 80%.
  • The borrower could not be behind on their mortgage payments, which is crucial. They could not have had any delinquent payments in the previous six months, and they could not have had more than one 30-day delinquent payment in the previous year.
  • There was no requirement for a minimum credit score in a HARP mortgage loan.

The program did not provide financial assistance. Instead, HARP mortgage loan collaborated with lenders to provide refinancing options. To see if their existing lender participates in the program, homeowners should contact them or go to the HARP website.

What Happened to the Home Affordable Refinance Program (HARP)?

Even though HARP mortgage loan is no longer available, Fannie Mae and Freddie Mac offer programs to help distressed borrowers refinance their houses.

Option for a Fannie Mae Refinance with a High LTV

This program is designed for current homeowners on their Fannie Mae mortgage payments but has an LTV ratio that exceeds the limit allowed for a normally restricted cash-out refinance.

For the borrower, the refinance choice must result in one of the following:

  • A lower payment of principle and interest
  • A lower rate of interest
  • A shorter period of amortization
  • A more stable mortgage product, such as converting from an adjustable-rate loan to a fixed-rate loan

Borrowers must make timely payments, with no 30-day delinquent in the previous six months. Furthermore, they can only have one 30-day delinquent in the previous year and no delinquency longer than 30 days. 

Mortgage Refinance with Freddie Mac Enhanced Relief

This program is for Freddie Mac borrowers who are current on their payments but are not eligible for Freddie Mac’s conventional “no cash-out” refinance option because the new mortgage would exceed maximum LTV limitations. Fixed-rate mortgages have no maximum LTV ratio, whereas adjustable-rate mortgages have a maximum LTV of 105 percent.

Unfortunately, there are many scams out there that try to take advantage of people. There are some suspicious things to look out for when applying for a HARP mortgage loan. If an applicant starts getting phone calls from someone promising that if they go through their supposed services, they will be more likely accepted in getting the mortgage loan, they should report it. The truth is, it is unnecessary to have any other person or company help someone to qualify, and there is no way that they can increase someone’s chances of getting approved whatsoever. Also, anyone trying to tell someone they don’t have to make their mortgage payments is probably lying. Doing this can cause more harm because if someone doesn’t make their payments it could disqualify them. Another scam out there tries to get struggling homeowners to sign over the deed to their home. Report anything suspicious like this to authorities, and never sign anything you aren’t completely sure is safe.

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