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WHAT IS HARP?
The Home Affordable Refinance Program or HARP was altered on November 15th, 2011. Sweeping changes were made, allowing many people who otherwise wouldn't have qualified, to refinance into the historically low interest rates of today. The HARP program was designed to help homeowners who are "under water" with their homes' value due to depreciation. HARP guarantees loans that banks give to consumers that are experiencing a negative equity position because of the state of the housing market in America today.
There are qualifications; a homeowner must be current on their mortgage within the last 6 months. He or she may have one 30 day late reported in the prior 6 to 12 months. The consumer must be employed and their mortgage must be currently guaranteed by Freddie Mac or Fannie Mae.
Once you have figured out who owns your mortgage, you can figure out whether you are going to do a DU Refi Plus (HARP program for those with Fannie Mae Loans) or an Open Access loan (for those with Freddie Mac loans. Interest rates are at an historical low, with 15 year fixed rate mortgages in the 3.375-4% range and 30 year fixed rates in the 4-4.375% range, it is a great time to refinance.
The HARP program doesn't help people who are delinquent or facing foreclosure proceedings, it is tailored for people who are on time on their payments; a reward, finally, for those who have paid their mortgage responsibly. On the other hand, it further will help to ensure that those who are struggling with no equity will not walk away from their homes because lowering an interest rate substantially will make current mortgage payments easier to meet.
Where can you go? When looking to take advantage of the Home Affordable Refinance Program (HARP)? It has been my experience that most local banks have been reluctant to take part in the HARP program. An experienced broker may be the way to go. Brokers have access to several different lenders and may be able to obtain a lower rate for you than a bank might because they deal with multiple investors and can put you into a program determined by which lender is offereing the lowest rate at the time. Whether you decide to go with a Banker or a Broker, this is definitely the time to take advantage of today's low interest rates and the benefits of the HARP program.