HARP Application Guidelines (Home Affordable Refinance Application)
The first thing you should probably check on before submitting your HARP application is whether Fannie Mae or Freddie Mac purchased your loan or not. Your mortgage had to have been purchased by May 9th 2009 and must be currently owned or at least guaranteed by either Fannie Mae or Freddie Mac. The HARP program is not for individuals who have recently purchased a home. It was designed to help those home buyers who saw their equity disappear after the burst of the housing bubble.
A great deal of these homeowners have interest rates that are high compared to today’s standards and can financially benefit from the program in a significant way. The problem until now has been either borrowers have had foreclosures, bankruptcies and other deficient credit that has kept them from qualifying. Well many of those credit restrictions have been lifted paving the way for hundreds of thousands of homeowners to refinance their mortgage even if they are upside down in value!
The HARP program is unprecedented in that you can actually borrow more money than your home is worth. It almost seems too good to be true but it is. Our government has provided this opportunity to under water homeowners and we highly suggest that you take advantage of the program if you are eligible to do so and can either save money or reduce your loan term. If you are ready to go ahead and fill out your Home Affordable Refinance application then please do.
HARP Application And Guideline Points To Acknowledge:
One HARP application tip you should be aware of is the typical waiting period for a foreclosure and bankruptcy on your credit report is 3 years respectively before you are eligible for any government backed mortgage of any sort. Those seasoning requirements have been lifted for the Home Affordable Refinance Program. The kicker is that you have to have some decent pay history on your current mortgage. You are allowed 1 thirty day late payment in the last 12 months and no 30 day late payments in the past 6 months. The updated guidelines have eased this restriction as it used to be even more stringent.
Another HARP application tip you should be aware of before applying is that your current loan to value ratio can’t be less than 80%. That means if you owe less than 80% of the current value of your home you can not utilize the program. The previous loan to value limit for Freddie Mac backed mortgages was 105%, and the previous loan to value limit for Fannie Mae backed mortgage was 125%. These loan to value limits have been lifted entirely. If your loan to value is over 125% you may need to wait until March before you can utilize the program as the government can not guarantee these loans until the automated underwriting software is updated with this new overlay which is scheduled for March.
It’s worth noting that if you decide you want to refinance into a 40 year mortgage that the max loan to value allowed is 105%, and if you are wanting to refinance into a mortgage less than your current term you need to be aware that if your mortgage payment goes up 20% higher than your current payment the debt to income ratio allowed will be 45% and there will be a minimum credit score imposed of a 620 middle. The 45% debt to income ratio simply means your monthly debt, in terms of installment loans, minimum credit card payments, insurance, property taxes can not exceed 45% of your total gross monthly income if you are w-2 and your net income if you are self employed. Please feel free to fill our HARP application by clicking on the link to the right that says Apply Now.
Author: Keith Meredith
HARP Application Related Articles:
Home Affordable Refinance Application, Home Affordable Refinance, HARP Mortgage
