Low Interest Rate Refinancing For Making Home Affordable

The home affordable refinance program (HARP) is an alternative to the HAMP under the MHA plan. If the market price of your home has declined substantially and you are finding it difficult to qualify for traditional refinancing, you may determine your qualification for HARP. The program, which went into effect in early 2009, seeks to help homeowners who are currently “underwater” on their mortgages and as a result, owe more on their homes than what they might be actually worth. At the time of its initiation, the HARP schedule was supposed to benefit almost 5 million borrowers but till date very few homemakers have got benefited as per records.

What is home affordable refinance schedule?

The HARP is one of the main MHA program alternatives alongside the Home Affordable Modification Program specially structured to assist responsible homeowners with declining home values. To help borrowers in overcoming the financial crisis generated on account of rising level of mortgage debts, the HARP provides refinance home loans. Thus, with HARP refinancing homemakers can get a new loan for replacing the existing unaffordable mortgage at a low interest rate and much better terms. And it may prove to be one of the best options to shift from a high interest rate adjustable rate mortgage (ARM) to a low fixed rate stable as well as affordable mortgage. Nevertheless, to be eligible to receive HARP benefits, borrowers will first have to determine their qualification for the federal government initiative.

Making home affordable refinance guidelines

To qualify for the HARP plan, homeowners will be required to meet the below mentioned basic conditions.

• Home to be refinanced has to be owned and primarily occupied by the applicant.
• Present mortgage has to be either owned or insured by Fannie Mae or Freddie Mac.
• Fannie Mae or Freddie Mac must have guaranteed the mortgage before 31st May, 2009.
• Fannie Mae loans, refinanced during March-May 2009, can qualify for a second refinance.
• Current Loan-To-Value ratio (LTV) of the homeowner has to be more than 80% but not over 125%.
• Borrower should have been regular in paying monthly installments for the past 1 year.
• Only one missed monthly payment with a default not exceeding 30 days will be permitted.
• Financial hardship situation has to be clearly foreseeable and has to be well documented.
• Refinancing for second lien is possible if loan dues owed on first lien are less than 125% of the home value.

There could be similar type of certain monthly income and credit verification requirements which applicants could be needed to satisfy. Fannie Mae and Freddie Mac loan look up tools may be used to assess your HARP qualification. Besides, you may also contact your present mortgage servicer to know more about your eligibility.

How to qualify for home affordable refinance program?

You will have much better chances of being HARP approved if you follow a systematic process. To that effect, you may take following initial steps into account when considering applying for the HARP.

• First find out if your mortgage loan has been sold to Fannie Mae or Freddie Mac before 31st May, 2009.
• Get proper information related to detailed HARP eligibility guidelines from present as well as other lenders.
• Gather all documentation necessary to be produced along with your HARP application, in case you are eligible.
• Compare refinancing interest rates and costs provided by different mortgage servicers participating in the schedule.
• Choose the right lender for your situation and negotiate the rate of interest and terms with the HARP refinance lender.
• Complete the application package and attach the required paperwork along with your HARP refinancing loan application.

List of documents:

• Copies of recent paystubs
• Copies of latest tax returns
• Get updated mortgage statement
• Work details of income and expenses
• Details of second home mortgages, if any
• Information about account balances and payments related to credit cards or student loans.
• Certification for having steady source of employment and all records for previous jobs.

The home affordable refinance plan requirements can be extensive, only a competent mortgage professional or a HUD approved housing counselor will be able to tell you more about the exact type of documents which need to be readied for submission. Today help is easily available in your neighborhood; all you need to do is just seek online assistance for locating it. By seeking guidance from an expert who is well versed with the HARP eligibility guidelines and approval process, you could get assisted not just in determining your qualification for the program but also in preparation of correct and accurate paperwork that is demanded by lenders. This ultimately helps you to save a lot of time and energy as well as choose the right option for your specific financial and credit situation.