HARP Home affordable refinance program: Refinancing tips

You can refinance with HARP  home affordable refinance program  even when you are under water. After the real-estate house of cards collapsed in 2008, the federal government stepped in help struggling homeowners. The answer was the HARP Home Affordable Refinance Program.

By using mortgage lenders, HARP has helped numerous homeowners refinance out of high interest rate mortgages. Homeowners benefited by replacing  adjustable rate mortgages with low 30 year fixed-rate mortgages. With HARP being extended through 2015, the government anticipates millions of additional homeowners will benefit from the HARP program.

There are two critical requirements out of the homeowners control that must satisfied in order to qualify for HARP. First, your existing home mortgage needs to be owned by Fannie Mae or Freddie Mac. Secondly, the loan had to have been purchased before June 1, 2009. (See if you loan is owned by Fannie or Freddie)

In spite of the widened eligibility guidelines offered by HARP 2.0, several banks as well as mortgage lenders offer a watered down version of the program. These Lenders are capping loan to values and requiring minimum credit scores in order to qualify. Finding a lender that offers the HARP program as intended by the Government has proven to be difficult for homeowners. This has resulted in thousands of homeowners running to local mortgage brokers for help. Mortgage brokers typically have several lending options for your HARP loan. They are able to sent your loan to multiple lenders unlike the large bank that offers only one HARP option.

Here are several tips to take into account when considering a HARP refinance  

1. Choose your Lender wisely. Rates on HARP loans vary from lender to lender more than any other mortgage loan program. Rates are based on the banks or mortgage lenders tolerance for risk. Find the best APR and the lowest closing costs.

2. Experience with HARP important. Educate yourself on HARP before reaching out to a mortgage professional. If you seem to know more about the loan program than the loan officer that’s a bad sign. Learn the basic benefits to HARP and ask your loan officer some basic questions about HARP to see if your working with a knowledgeable loan officer.

3. Restrictions added to the HARP program. Imposed restrictions by mortgage lenders are very common. After the mortgage crisis there is still an uneasiness in the mortgage industry. Not all lenders feel comfortable lending to homeowners that are underwriter by more than 25% or with credit scores below 640. HARP doesn’t have a restriction on how far underwater a homeowner is. Any restriction on loan to value would be imposed by the lender and not HARP.

Knowing refinance tips and using a knowledgeable mortgage professional with multiple options will result in a higher success rate in  refinancing or refinancing with HARP home affordable refinance program.