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How To Use The Home Affordable Mortgage Refinance Program (HARP)

Millions of homeowners, in all types of financial situations, are now eligible to get a money saving mortgage refinancing thanks to the HARP stimulus plan. HARP (Home Affordable Refinance Program) allows homeowners who are upside down on their home loan to get a mortgage refinance that will lower their monthly payments, prevent a foreclosure, or both. Here are some eligibility details and other information homeowners should be aware of if they want to take advantage of these new Government programs.

Many responsible homeowners have been feeling the negative effects of the bad housing market, and are almost being punished for it. However, thanks to HARP, help is now available for the many homeowners who have been making their payments but have seen their home value decline. These homeowners are considered upside down on their mortgage because they owe more than their home is worth, even with years of payments being made. In the past, it was very difficult, if not impossible to get a mortgage refinancing. Now though, things have changed, and major mortgage lenders and banks are offering new home loan options to nearly any homeowner. Even homeowners with upside down loans or other financial situations.

HARP is designed to help homeowners who are unable to get a traditional mortgage refinancing. The goals of this program are to provide responsible homeowners a chance to get into a better, more stable, and more affordable, monthly mortgage payment. Just like every loan and refinance though, the typical closing costs and associated fees will still apply. The savings to be had though from the low home interest rates available now, and through the stimulus program, will significantly offset the costs in most cases.

Basic eligibility requirements for HARP include:

-A home loan that has been paid in full, and on time, for the past 12 consecutive months.

-A LTV (Loan to value) ratio that is 80% or more.

-A home loan that is currently owned or backed by either Fannie Mae or Freddie Mac

-The mortgage must have been closed on and finalized on or before May 31, 2009.

-That the home loan has not been refinanced in the past 3 years.

It may seem like a tough thing to qualify for, but in reality, it is not. Fannie Mae and Freddie Mac are the two largest mortgage providers in the country. Even if your payment is made to a third party, odds are that one of those two companies ultimately own your home loan. Also, 12 on time payments, out of a typical 360, is not that hard to accomplish. The biggest benefit that HARP provides is for homeowners who are underwater on their current mortgage and would not be able to get a home loan refinancing otherwise.

Once a homeowner has established their eligibility for HARP, it is up to them to do some basic homework. This will include contacting your current lender, and others, to see if they participate in HARP and what options exist for you. It is crucial to contact a variety of different banks and lenders to ensure that you are getting the best, and most cost effective, mortgage refinancing possible. Many times, fees, available interest rates, and even loan types differ from place to place and the only way to discover this is to contact them yourself.

While the process may seem intimidating, it is actually pretty straight forward after these basic steps are taken. Many homeowners are reluctant to get a mortgage refinancing due to how complex it can seem. That is why there are mortgage lenders and banks who have the experience, knowledge, and resources, to help. That is also what part of the closing costs and fees are for. While it may not be right for everyone, many people will save a lot of money through using HARP for themselves. Contact your lender or bank today to see how you can benefit.


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