What is HARP?
HARP stands for the Home Affordable Refinance Program. This program is available to a variety of qualifying individuals, however, can be extra helpful for seniors with limited equity and limited income.
This program allows you to refinance your mortgage for either a lower interest rate or a lower monthly payment. This option is only possible for homeowners that don’t have much equity in their home and are responsibly up-to-date on their payments. If an applicant refinances through the HARP program, they could be able to save thousands over the course of their loan.
If you are a homeowner interested in HARP, your current mortgage will need to be financed under Freddie Mac or Fannie Mae. If you have repeated delinquencies on your loan within the past year, and have a loan-to-value (LTV) ratio of over 80% then you will likely be ineligible.
Luckily, eligibility opportunities have become more inclusive over the years which means if you applied previously and were denied, you may now be eligible. A lot of strict guidelines and older risk fees have been updated or removed, making this program more accessible. For example, prior LTV rates were set at 125% but now the program accepts applicants with homes at almost any value if you are able to provide responsible, on-time payments.
This program is only available during a specific timeframe. For example, if your goal is to refinance this year, then you need to do so before the end of the calendar year (December 31st, 2020). If you do not apply during this time frame then your opportunity to refinance will only be available for the following year.