The Home Affordable Refinance Program (HARP) is a federal program for struggling homeowners in the United States. The program was designed in 2009 by the Federal Housing Finance Agency. The agency created the program to help certain debtors refinance their homes without complications. Many people who own homes are qualified for this special program.
Reasons that Homeowners May Apply for HARP
The biggest reason that homeowners apply for HARP is to reduce the payments or interest rates associated with mortgages. Some people have signed mortgages with variable interest rates. A variable interest rate can fluctuate over time, sometimes becoming less affordable. An increase in a mortgage interest rate can place a great strain on a tight budget. If you are barely able to pay your mortgage, you may start falling into overwhelming debt after a variable mortgage increase. The HARP program often allows homeowners to refinance their mortgages with terms that make life easier.
Credit Repair
A homeowner may apply for HARP assistance to repair or maintain a credit ranking. Credit scores slowly improve over time with prompt payments. You may want to use the HARP program to decrease your payments so that you can reliably repay your debts and improve your score.
Denied Approval for Previous Refinancing
Traditional lenders may deny a loan for refinancing for a wide variety of reasons. One reason that a traditional lender may turn down a refinance is value. A decline in home value will warrant a denial from a traditional lender. A homeowner who owes more than the market value on his or her home may also receive a denial from a traditional lender. The HARP program gives many opportunities to such borrowers.
Qualifying for the Harp Program
You must meet certain criteria before applying for the HARP program. First, you must be current on your mortgage payments to qualify. You must have a consistent 12-month payment history with the bank. Timely payments are payments that are never more than one month past due. You must also have a mortgage through a company that offers the HARP program; not all banks are enrolled.
Another crucial qualifying element is Freddie Mac and Fannie Mae affiliation. The mortgage that you have must be owned or guaranteed by one of these companies. This qualifying factor is non-negotiable. An interested consumer can call or contact Freddie Mae or Fannie Mae to find out his or her status. Alternatively, there are also some online tools that can indicate whether your loan is related to Freddie Mac or Fannie Mae.
