The Home Affordable Refinance Program (HARP) is a federal government initiative that was introduced in 2009 as part of the Making Home Affordable program. HARP is designed to help homeowners who are underwater on their mortgages – that is, they owe more on their mortgage than their home is currently worth – to refinance their mortgages into more affordable and sustainable loans. HARP is intended to help homeowners who may not qualify for a traditional refinance due to their financial situation or because their homes have lost value since they purchased them.
One of the main goals of HARP is to help Idaho homeowners avoid foreclosure. When a homeowner falls behind on their mortgage payments, it can be difficult to catch up and get back on track. Foreclosure is a costly and stressful process for both the homeowner and the lender, and it often results in the homeowner losing their home and damaging their credit score. By allowing homeowners to refinance their mortgages into more affordable loans, HARP helps homeowners avoid defaulting on their mortgages and potentially facing foreclosure.
HARP is available to homeowners whose mortgages are backed by Fannie Mae or Freddie Mac, which are government-sponsored enterprises that purchase and guarantee a large portion of the mortgages in the United States. To qualify for HARP, homeowners must meet certain eligibility requirements. For example, they must be current on their mortgage payments and must not have missed any payments in the past six months. In addition, their mortgage must be at least 180 days old, and the loan-to-value ratio (LTV) of their mortgage must be greater than 80 percent. The LTV is a measure of how much a homeowner owes on their mortgage compared to the value of their home. A high LTV indicates that the homeowner has a significant amount of equity in their home, while a low LTV indicates that the homeowner has a small amount of equity.
There are several benefits to participating in HARP. For one, it can help homeowners reduce their monthly mortgage payments by refinancing their mortgages into loans with lower interest rates. This can make it easier for homeowners to afford their mortgage payments and may help them avoid defaulting on their loans. In addition, HARP allows homeowners to refinance their mortgages even if they have little or no equity in their homes. This is important because traditional refinance programs often require homeowners to have at least 20 percent equity in their homes in order to qualify.
Another benefit of HARP is that it allows homeowners to refinance into longer-term loans, which can help lower their monthly payments even further. For example, if a homeowner has a 15-year mortgage with a high interest rate, they may be able to refinance into a 30-year mortgage with a lower interest rate. This would lower their monthly payments, making it easier for them to afford their mortgage.
Finally, HARP allows homeowners to refinance their mortgages without having to pay for costly mortgage insurance. Mortgage insurance is required for homeowners who have less than 20 percent equity in their homes, and it can add hundreds of dollars to their monthly mortgage payments. By refinancing through HARP, homeowners can avoid having to pay for mortgage insurance, which can save them a significant amount of money over the life of their loan.
HARP has helped many Idaho homeowners refinance their mortgages and avoid foreclosure. However, it is important to note that HARP is not available to all homeowners. To determine if you are eligible for HARP, you should contact your mortgage servicer – the company that collects your monthly mortgage payments – and ask if you qualify. You may also be able to find more information about HARP and other assistance programs on the Making Home Affordable website.
Overall, HARP is a valuable program that has helped many homeowners refinance their mortgages into more affordable and sustainable