HARP Can Make Home Loans More Affordable and Within Reach

In 2008, the housing market crashed. Millions of homeowners found themselves underwater in their mortgages, unable to pay grossly inflated mortgages and unable to refinance their home loans. The number of houses going into foreclosures grew in record numbers. People saw their properties lose more than 50% in value, and investors saw their portfolios deteriorate rapidly. People with ARM’s saw their interest rates begin to climb and were unable to refinance into a more stable, fixed rate. A little more than 5 years later, the market is beginning to slowly recover. Homeowners and investors alike are starting to once again look into home refinance loans.

Many people struggled to hang onto their homes and to keep making their payments on time. Newly created programs can bring relief to the homeowner, making it easier for those who remained steady during the mortgage crisis to qualify for new home refinance loans. The Home Affordable Refinance Program or HARP refinance has been designed for the people who have remained current, not more than 30 days late on a payment in the past six months, owe more than eighty percent of the current value of their home and have a credit score higher than 620. Mortgages owned by Fannie Mae or Freddie Mac may also qualify for the Home Affordable Refinance Program.

Designed to help homeowners who have worked hard to remain consistent in their payments, and wanting to stay in their home, HARP may bring much needed relief. The plan enables borrowers to refinance their current mortgage, often lowering their principal and interest payments, and making them more affordable. These new home purchase loans, are designed to stabilize the housing market, and bring much needed relief to the mortgage fatigue many are feeling.

The program assists borrowers to completely refinance their homes with a brand new mortgage, interest rate and terms. For those with adjustable mortgage rates, the opportunity to qualify for a fixed interest rate translates into a consistent payment each month. Many people have balloon mortgages looming ahead of them. At the time of purchase, it seemed like a good idea; the homeowner would purchase a home making minimum payments over a 5 or 10 year period, paying down only a small portion of the principal balance. In a few years, the balance of the amount financed would become due. During the time the home loans were taken out, it would have been easy to refinance the mortgage. Then came the crash and an inability to refinance. HARP can offer relief.

Investing in real estate has always been a good place for people to put their money. For generations, people have been taking out mortgages to buy their piece of the American real estate pie. It was a good way for people to build their retirement nest eggs, making their golden years a bit sweeter. Home ownership is still a good investment in the future, and now there are new programs designed to make it easier.