ON THIS PAGE
HARP Refinance Options
The Home Affordable Refinance Program (HARP) offers underwater homeowners the ability to take advantage of market conditions resulting in long term mortgage interest rates being at almost 40 year lows.
While limited in it’s scope, the HARP program created underwriting exceptions and flexibility in terms of offering refinancing options for those homeowners that owe more than the home is worth.
The biggest challenge is, this money saving option is only available to a very limited number of underwater homeowners.
HARP 2.0 Qualifying Guidelines
Set to expire on December 31st, 2013, HARP 2.0 was recently extended another 2 years and is now available until December 31st, 2015.
HARP 2.0 may be an option for you if:
- You have a good payment history with no late payment in the last 6 months, and no more than one 30 day late between 6 to 12 months ago.
- Your mortgage must be owned or guaranteed by Fannie Mae on or before May 31, 2009.
- Your home can be a primary residence, second home or investment property.
- Your home equity has decreased and is currently greater than 80% loan to value.
The original premise of offering reduced interest rates to underwater homeowners was to promote an acceleration strategy.
When originally announced, the President was encouraging qualified borrowers to take the lower interest rate, while continuing with their current payments, resulting in additional principle payments being made each and every month to recover lost equity quicker.
The HARP 3.0 Solution
For almost as long as the HARP 2.0 program has been available for those that meet the above qualifying criteria, there has been talk about a solution for everyone else whose loan is not owned by Fannie Mae or Freddie Mac.
There are many more homeowners who do not qualify for HARP 2.0 than those that do.
The most recent push to bring an underwater refinance solution to those not eligible for HARP 2.0 was a bill introduced in February 2013 named H.R. 736: Responsible Homeowner Refinancing Act of 2013.
Mortgage insiders are calling this expansion of HARP guidelines, HARP 3.0.
A visit to www.govtrack.us shows that while the bill has been referred to congressional committee, the probability of this effort making it past the Committee is less than 10%.
Assuming this bill defies the odds and makes it out of Committee, the likelihood of HARP 3.0 ever seeing the light of day is less than 3%.
HARP 3.0 May Not Be Necessary
Since January 2013, California home prices have been steadily rising; checking in at just over a 30% increase in value for single family homes, 38% for condominiums.
While not all markets are experiencing this type of equity growth, this trend is encouraging for underwater homeowners as values creep back into the black.
On a daily basis we are speaking with homeowners that are now in a position to take advantage of low equity refinancing options as high as 97% loan to value.
If you are not quite above water with the value of your home, industry experts are predicting that this positive equity shift will continue for at least the next 12 months, possibly leveling out mid to late 2014.
Exploring Your Options
While there’s no guarantee of California home values continuing at this pace, patient homeowners may find themselves in a position to take advantage of low equity refinance options soon than later.
If you are unsure of the current value of your home, I encourage you to contact a lender today and explore your options. You might be surprised at how much your home’s value has risen in the past 6 months.
The value of your home is determined by what homes in your area are selling for. Without paying for a real estate appraisal, a direct lender has access to sales data and public records that allow us to determine with a high degree of probability the approximate value of your home.
For a no cost, no obligation Home Value Report, complete this short inquiry and we will get back to you with your value analysis and a list of what options may be available to you either now, or in the near future depending on market trends in your neighborhood.