September 1, 2015 | By RGR Marketing Blog

Getting the Low-Down on HARP Loans

The financial crisis may ostensibly be over, but for some homeowners, it doesn’t seem that way. Many who purchased before the bubble burst are still underwater, and it’s been difficult for these beleaguered homeowners to find financial institutions willing to help them refinance.

But for those who qualify, there may be hope in the HARP Loan program. Is your mortgage business up to speed on HARP? Learn more about how this federal program works, and how your clients can benefit from taking advantage of it.

What Is HARP?

HARP stands for Home Affordable Refinance Program. It’s a federal initiative initiated by the Federal Housing Finance Agency. Initiated in March of 2009, this program is designed to help underwater homeowners and those with little equity refinance their existing mortgages.

Who Qualifies for HARP?

The Home Affordable Refinance Program is available to homeowners who are current on their mortgage payments, who have limited delinquencies over the past 12 months, and whose mortgages are held by Fannie Mae of Freddie Mac.

Originally, HARP targeted buyers with LTV greater than 80%, and limited program participation to those whose LTV ratios were no more than 105%, but the loan-to-value ratio cap was removed in 2011.

Other restrictions have also been amended. Eligibility was initially limited to mortgages acquired by Freddie and Fannie on or before May 31, 2009; now the date on the mortgage note can be used for qualification.

To take advantage of HARP, participants must benefit by either lowering monthly payments or transitioning to a more stable mortgage product (e.g. ARM to FRM). Also, it is important to note that those who have already refinanced their mortgages through HARP cannot do so again.

Why Refinance Through HARP?

The reasons for refinancing through HARP vary, but generally speaking, they fall into the following categories.

For those with high-interest mortgages, HARP refis may provide lower interest rates. Borrowers with unpredictable variable-rate mortgages can use HARP to convert to fixed-rate mortgages, which are an especially attractive option now, with interest rates still at historic lows.

HARP loans can also be used to lower monthly expenses, to free up cash flow to pay off debts, or to meet other needs. For those in a hurry to build equity, the HARP program may offer shorter payback terms. And because an appraisal is not usually required to refinance through HARP, clients often save money in closing costs.

HARP’s Days May Be Numbered

HARP was originally initiated in the wake of the housing correction, but has since been extended several times. The current deadline is set for December of 2016, and while some housing policy experts anticipate yet another extension, there’s no guarantee that will happen. So if your clients are considering applying for assistance through the HARP program, you may want to encourage them to do so while the program is still available.

The Sweet Sounds of HARP

For some of your clients, the Housing Affordable Refinance Program could mean the difference between remaining homeowners and undergoing foreclosure. But not everyone is aware that the HARP program exists. By educating your clients on HARP, you’ll be contributing to a healthier economy, and those struggling to hold on to their dreams of homeownership will certainly thank you.

And if you're looking for even more ways to enhance the marketing that your mortgage business does, then consider buying high quality mortgage leads today, and increase your revenue before the year is over! Contact RGR Marketing to learn more now.

[Photo Via: MyMortgageHomeLoans]

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