HARP Refinance Program

Basics of the Massachusetts HARP Program

Known as HARP 2.0, DU Refi Plus or the Obama Refinance Program, the Home Affordable Refinance Program is designed to assist homeowners in refinancing their mortgage when the value of their home has declined, making traditional refinancing no longer an option.

HARP stands for the Home Affordable Refinance Program, which is a government loan program that was recently updated to help more people who have underwater mortgages.

Requirements of the Home Affordable Refinance Program (HARP) in Cape Cod

Your history mortgage needs to have been perfect for the past 6 months meaning, no late payments in order to be eligible for the HARP Loan Program. Your mortgage history should reflect no more than one late payment within the past 12 months while still maintaining a perfect payment history within the last 6 months.

A few other requirements for eligibility for the HARP Program are listed below:

• A credit score of at least 620 or higher is needed.
• Debt-to-Income must be below 45%.
• Perfect mortgage payment history within the past 6 months.
• Must be current on your mortgage payments.
• Your current home loan is owned or guaranteed by Fannie Mae or Freddie Mac.
• You currently owe more than your home’s worth, or there is minimal equity in your home.
• You have had no 60 day late payments in the past 12 months.

There are many benefits to the HARP Refinance Program, you can find out more by clicking on the overview tab.

Massachusetts HARP Refinance Program Background

The Home Affordable Program was launched back in 2009 and was granted to the Emergency Economic Stabilization Act. The Obama administration created the Making Home Affordable Program (MHA) to help responsible underwater homeowners avoid foreclosure, as opposed to the Home Affordable Modification Program (HAMP), which was designed to help homeowners who were near foreclosure.

The HARP Program was created mainly to help homeowners who are current on their monthly mortgage payments but was unable to refinance due to the drop of their home value due to the U.S. housing correction.

In 2006 millions of homeowners took a great lost in equity of their properties because of the significant increase in the housing market prices. In result of this, it prevented homeowners from being able to refinance their current mortgages not allowing them to lower their interest rates due to their PMI (Private Mortgage Insurance) requirements and a higher LTV (Loan-To-Value). To give an example of this; a home that was purchased $250,000 may be worth $130,000 today. If the loan on that property is now $200,000, the new LTV would be 153% (owing 53% more than the value of the home). Making the homeowner ineligible for traditional mortgage programs and also creating mortgage insurance restrictions.

The original Home Affordable Refinance Program was intended to expand on conventional mortgage refinance mortgage options to homeowners who had more than 80% and less than 125% in their LTV. However, this intended plan was not able to reach the millions of homeowners due to banks, lenders and mortgage insurance companies not wanting to take part in offering this program.

In January of 2012, according to The FHA Report, Freddie Mac and Fannie Mae had refinanced nearly 1.1 million loans through the Home Affordable Refinance Program since it was first put in place, and only 100,382 mortgages had between 105% and 125% on their LTV.

Benefits of the HARP Loan Program:

-There are many benefits to refinancing your current mortgage through the Home Affordable Refinance Program. Among these benefits is the ability to make your monthly payments more manageable by lowering your interest rate.

-Another great benefit of the HARP Program is to help borrowers build in home equity quicker by shortening the term of the loan while lowering their interest rate. In result this will help the homeowner avoid the continuance of their underwater status and help them gain back control of their finances.

-HARP borrowers also benefit from a more stable loan by transitioning from an adjustable interest rate to a fixed interest rate. This helps prevent the homeowner from being affected by future fluctuations in the housing market. They will never have to worry about a bad housing market effecting their interest rates in the future and can rest assured that they will be protected.

Massachusetts HARP Application Process

HARP 2.0 guidelines have simplified the HARP application process and made the mortgage relief plan accessible to more homeowners by allowing multiple lenders to participate in the program.

With the update, many of the previous Cape Cod mortgage insurance and appraisal barriers have been streamlined or waived. Best of all, the new Massachusetts HARP program allows Cape Cod borrowers to shop mortgage companies for better rates.

There are a few things you should consider or be aware of prior to applying for a Cape Cod HARP loan:

• Does Fannie Mae or Freddie Mac own your loan?
• Are you current on your mortgage payments?
• Will a new loan improve your situation by lowering your rate or payment term?
• Do you plan on staying in your home for an extended period of time?
• Can you verify income and/or employment if the bank requires a further look at your scenario?
• Will this be your first refinance under the HARP program?
• Is your mortgage balance higher than 80% of your estimated home’s value?

If you were able to answer “YES” to the questions above, then it may be a good idea for you to consider following through with a quick HARP Application to determine your eligibility.