HARP…yet another acronym in the financial frenzy post-mortgage meltdown. But, this one IS a difference-maker. HARP stands for “Home Affordable Refinance Program.” Recently, the government released HARP 2.0, as HARP 1.0 was not proving itself effective.
The basic premise behind HARP was to allow homeowners the ability to refinance their mortgage loans, even if they were upside down on their loan – that is, they owed more than their home was worth.
The catch in HARP 1.0 was the limit on how far “underwater” you could be on your mortgage. That limit was anywhere between 105% and 125% loan- to-value. Sadly, home price values have sunk in areas close to our markets. Many had loan-to-values over 125%, thus did not qualify for HARP 1.0.
Here enters HARP 2.0, which eliminates the loan-to-value cap of 125%. The premise being, the investor is already married to the loan, which means if the investor can improve the borrower’s ability to repay the loan, then all-the-better to help reduce the chance of a default.
There are a few important stipulations though:
- Fannie Mae or Freddie Mac must own or guarantee your loan. If you have a loan that is owned by a bank or private investor, then it would not be eligible for a Fannie Mae or Freddie Mac HARP loan.
- Your mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. In other words, if you closed your loan with Arvest before May 15, 2009, you should be eligible. If you are unsure, there is a way to find out if your loan is eligible, just by contacting us.
- You must be current on your mortgage with no late payments in the past six months or no more than one late payment in the last 12 months.
- As with any loan program or special offer, there are other stipulations and criteria – the best advice is to contact an Arvest mortgage lender and check it out.
The bottom line: If you have tried to refinance your home loan or thought you could not refinance due to your home’s value, and you meet the basic criteria above, then it is worth a few minutes to reach out to an Arvest mortgage lender to see if a HARP loan may be available for you.