Can HARP Help You Refinance Your Mortgage?

Written By Jeff Hindenach
Last updated November 9, 2017

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February 3, 2016

Simple. Thrifty. Living.

he Home Affordable Refinance Program (HARP) was created to help homeowners affected by falling property values caused by the 2008 housing bubble. HARP could be a good option for refinancing your mortgage. Learn whether you qualify for the program and how you can apply for assistance.

HARP qualifications have changed several times since it was created in 2008. Even if you’ve been turned down before, you may want to review the latest requirements to see whether you qualify. If you meet the following qualifications, there’s a good chance HARP can help you refinance your loan. You must be current on your mortgage with no more than one late payment in the last 12 months and have:

  • Purchased the property as your primary residence or an investment
  • A loan that is owned by either Fannie Mae or Freddie Mac
  • Gotten your loan before or on May 31, 2009

You also must owe more on your home than it is worth, a situation commonly referred to as being “underwater.”

HARP used to limit refinancing options to homeowners with loan-to-value ratios of 125 percent or lower. In other words, if your home was worth $100,000, you could refinance through HARP as long as you didn’t owe more than $125,000. As of December 2011, the negative equity limit has been removed, so more people can potentially qualify.

Refinancing through HARP offers benefits that could make mortgage repayment easier, including:

  • Getting a lower interest rate
  • Switching from a 30-year to 15-year mortgage
  • Lowering your monthly payments

Homeowners who refinance through HARP save $179 per month, on average.

You must follow three steps before you can take advantage of HARP. The first thing you should do is gather your financial records to show that you qualify. These records include:

  • Pay stubs or income tax returns
  • Mortgage statements
  • Second mortgage statements, if you have one

After you gather your documents, contact your mortgage company to see whether it’s an approved HARP lender. If it’s not, you need to contact an approved HARP lender.

Finally, start the application process. Fill out and submit any application the lender gives you. If it’s approved, you then go through the closing process before you have officially refinanced your loan. The entire process should take between 30 to 45 days.

Assuming all goes well, you will have a lower monthly payment that makes it easier for you to continue living in your home.

About the Author

Jeff Hindenach

Jeff Hindenach is the co-founder of Simple. Thrifty. Living. He graduated from Bowling Green State University with a Bachelor's Degree in Journalism. He has a long history of financial journalism, with a background writing for newspapers such as the San Jose Mercury News and San Francisco Examiner, as well as writing on personal finance for The Huffington Post, New York Times, Business Insider, CNBC, Newsday and The Street. He believes in giving readers the tools they need to get out of debt.

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