Home Loans Can Still Be Affordable

Deciding where you’re going to live is among the most fundamental questions in life. It’s also one that can produce a great deal of anxiety. Buying a home is a major investment at the best of times, and families often have to strain to put together every available penny to be able to afford a down payment and a mortgage. Once that happens, though, things don’t necessarily go perfectly smoothly. The economic downturn and housing crash of the past few years left a lot of families who’d worked hard for their homes in the terrible position of owing more on their home purchase loans than the property was worth. There are lenders who are willing to help the people in this situation.

It’s normal to be able to seek home refinance loans, but these are still secured by the value of the property. Because of that, the options offered through normal channels will normally not be available to someone who owes more than it is worth. Many people assume they simply have no option to refinance because they don’t have the ability or the willingness to hand over a lump sum to bring them up to par before taking out a new loan.

Thanks to the government, however, there is a specific program in place to make sure home loans for refinancing are available to the people who need them most. It wasn’t individual home buyers who caused the housing bubble and crash. Rather, it was the irresponsible lending policies that dominated at the time. A HARP refinance is available not for the people who are struggling and behind in their payments. There are other programs for that. This program assists those who are current in paying their mortgage but can not take advantage of a refinance due to their home being driven under financial water in the course of the housing price correction.

The major benefit of this program is that it allows people to take out new home loans, at better interest rates, without having to pay for Private Mortgage Insurance due to the amount they owe over the value. PMI can add up to a substantial amount of money and can often wipe out the benefits of refinancing entirely for a family who must pay it. This means people who qualify for this program and go through the process can reduce their mortgages and sleep better at night.