Will New Mortgage Refinance Rules Help You?
Are You Upside Down on Your Mortgage?
On October 24th, 2011, the Federal Housing Finance Agency, along with Fannie Mae and Freddie Mac announced a modification to the Home Affordable Refinance Program (HARP). The new version of HARP is designed to help people who were previously unable to refinance due to an excessive loan-to-value. The new HARP rules eliminate all limits on the amount of your mortgage relative to your property value.
Late Payment Rules Eased
In addition, there are easier mortgage payment history guidelines. You cannot have had any 30-day delinquencies in the last six months, and no more than one 30-day delinquency in the six month period prior. If you have recent late payments there is still hope! The end date for the HARP program has been extended to December 31st, 2013, so there is still time to qualify.
The Benefits
The benefits are potentially amazing. Your new mortgage will be at today’s low rates, which are in the 4% range. As an example of potential savings, if you owe $300,000 and have an interest rate of 8%, amortized over 30 years, your P&I payment would be $2,201. The same loan with a rate of 4% would have a payment of $1,432, a savings of $768 per month. You may also have the opportunity to switch to a shorter term loan (allowing you to reduce your principle balance sooner).
Bankruptcy and Foreclosure Seasoning Requirements Lifted
Of special interest to our credit repair customers will be the elimination of bankruptcy and foreclosure seasoning requirements. Prior bankruptcy and foreclosures on your credit report will not disqualify you, regardless of their age. In fact, you should not have to meet any credit or income qualifying requirements unless the refinance produces an increase in your principle and interest payment of more than 20% of your current payment.
To Qualify
To qualify, your mortgage must owned by Fannie Mae or Freddie Mac. Normally you would not know who owns your loan (it is rarely the same as the servicer to whom you send your payments). You can find out if you have a Fannie Mae or Freddie Mac loan by going to:
We are not mortgage experts! Please contact a mortgage professional for details and more specific qualifying information.
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4 Responses
You guys are excellent posting information like this. I never even heard of HARP. I have a mortgage and it looks like I may qualify for this refinance. People need to know this stuff! The fact that you could have had a recent bankruptcy or foreclosure on your credit report is amazing. I bet there are millions of people that just assume that they would never qualify for any refinance, much less anything as good as this. THANK YOU.
Emil,
You are very welcome. These changes are part of an attempt by the government to stem the damage in the real estate market, and to mitigate the foreclosure crisis. As far as we are concerned, there should be public service announcements on all of the networks during prime time to make this opportunity known to the public. There are millions of Americans that have not walked away from their homes, and are struggling to keep making their high rate mortgage payments, and with no hope of refinance because they think they will not qualify. Anyway, spread the word!
Hi Guys, I just posted a note on your new student loan article, but I wanted to add a note here to express our gratitude for posting this article on HARP. My husband and I have contacted our lender and started the HARP paperwork all because we read this article. It is going to save us a fortune. Thanks for taking the time to do such an awesome job.
Hi Darlene, Thank you so much for your post. HARP represents an amazing opportunity. We only wish more people knew about it. Best Wishes!