With 30 year mortgage rates closing in on 4% there has been a strong demand to refinance. However many homeowners have not been able to without high fees due to the decline in their property’s value. In response, the government created a program called the Home Affordable Refinance Program (HARP) which is available to homeowners whose loans are owned by either Freddie Mac or Fannie Mae, or approximately 95% of outstanding loans. The program allows you to refinance without mortgage insurance at today’s competitive rates and is most advantageous to those with high credit scores, a reasonable debt to income ratio, and a loan to home value of less than 93%.
Now for the caveats. The government is involved and the process is said to be slow and full of speed bumps. There is the risk that the process will get held up causing your loan lock to expire without the refinance going through. However the HARP loan is worth consideration for those who have already explored other options.
To determine if you are eligible, go to the Making Housing Affordable website and look up your property on the Freddie Mac or Fannie Mae website. If you have additional questions contact Professional Alliance
