How to Eliminate 15 Years of Mortgage Payments
Learn More About HARP
Now might be the best time in recent history for homeowners to refinance. It’s not just because the Federal Reserve has kept interest rates pretty low. There’s actually an even bigger saving opportunity awaiting roughly eighty percent of homeowners. Some consumers may have heard of the “Home Affordable Refinance Plan” (HARP).
This program was specifically created to help members of the middle class take even further advantage of historically low refinance rate. The results have been pretty remarkable thus far. Since 2009, over 3.2 million Americans have saved an average of $4,264 per year. This program was originally created to put money back into the hands of the middle class which helps the economy and take it away from the big banks who were responsible for burst of the housing bubble in the first place.
However, the big banks stand to lose a lot of money. For the first time in years, you can qualify to refinance even if the value of your home has fallen below what you currently owe on your mortgage. The other great thing about HARP is that it does not require you to refinance with your current lender, which means you’re free to shop multiple lenders for the lowest rate possible.
As you can imagine, the big banks are not very happy about this, and are currently doing everything they can in Congress to get rid of this program before more homeowners decide to cash in. The good news is, once you’re in, you’re in for good, and it only takes a few minutes to see how much you could be saving. The HARP guidelines or requirements for eligibility:
- Your loan must be backed by Fannie Mae or Freddie Mac.
- Your current mortgage must have a note date of no later than May 31, 2009
If you meet these two criteria, you may be HARP-eligible. If your mortgage is an FHA, USDA, VA or a jumbo mortgage, you are not HARP-eligible.
For those of you that have passed the criteria, you may be wondering, so what’s the catch? Well, the program was created a few years ago during the depths of the recession, and because the program required a lot of federal funding, the government can’t sustain it forever. In fact, there is an expiration date set for the end of 2016 for applications – meaning you can’t apply for HARP after that. However if you are approved before then, you will not be impacted at all.