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There’s nothing worse for a homeowner than being underwater with their mortgage. And when we use the term ‘underwater,’ we’re referring to the situation whereby the amount you owe on your mortgage is worth more than the value of your home. Thankfully, the HARP loan program offers a solution to this predicament.
The Home Affordable Refinance Program (HARP) was established by the Federal Housing Finance Agency in 2009 in response to the collapse of the US housing market in 2008. Homeowners suddenly found themselves with houses whose values were plummeting below the value of their mortgage. The objective of HARP was to help homeowners refinance their mortgages and avoid the costly fees associated with private mortgage insurance.
And, to encourage them to get involved in the program, mortgage lenders are guaranteed to be absolved of any liability for fraud relating to the original loan.
HARP proved to be a huge success and the program is due to remain in place until at least the end of 2018. It sounds a highly attractive solution for homeowners who are underwater, but you may be wondering what exactly the main benefits are. Let’s take a look:
- Refinance Costs are Lower: Securing a HARP loan can really help to lower your overall refinance costs. If you have an excellent credit rating then you may be eligible for the lowest possible interest rates. And the lower your interest rates then the more money you can plough into paying off your HARP loan each month.
- Long Term Fixed Rate Mortgages: Adjustable rate mortgages (ARM) can appear fantastic in the short term, but when the initial ARM phase ends then interest rates can shoot up. Thankfully, a HARP loan allows you to refinance on a fixed rate mortgage scheme between 10 – 30 years. This allows you to plan your finances more effectively and reduce the types of nasty surprises associated with ARM refinancing.
- No Minimum Credit Score: Damaged credit can soon escalate into all manner of financial hardships, but HARP does not discriminate on this basis. Therefore, even homeowners with a bad credit rating can enter into the HARP program. This allows them to get their mortgages back on track in a manner which is affordable and doesn’t leave them seeking out less favorable refinancing options.
- No Limit to the Amount Borrowed: Many alternative refinance programs base the amount that can be borrowed on individual incomes. HARP, however, does not use a maximum income limit to determine if a borrower can be accepted into the scheme. Instead, homeowners with a good income are more likely to get the refinance help they need to rescue their underwater mortgage.
- No Appraisal Costs: When the need for an appraisal report arises, then so can costly fees (around $500) and increased waiting times to approve a standard refinance package. With HARP, though, an approval report is rarely required, especially when a property value can easily be obtained through Fannie Mae or Freddie Mac. And this means that the homeowner can save time and money, two commodities which are in short supply when it comes to refinancing a mortgage.
HARP loans are packed full of fantastic benefits which can help you refinance when you find your mortgage underwater. It’s 100% free to apply for a HARP refinance and the savings can be huge, but this program will expire soon. There’s no better time to get involved with this exciting and sensible program, so don’t delay. CLAIM YOUR HARP LOAN SAVINGS NOW>>>