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As of June 25, 2018, we’ve made some changes to the way our mortgage approvals work. You can read more about our Power Buyer ProcessTM.

The Federal Housing Finance Agency (FHFA) has announced the extension of its Home Affordable Refinance Program (HARP) through the end of 2018.

HARP was created in early 2009 to help clients who owe more on their home than it’s worth lower their rate or change their term. Typically when you refinance, you need to have a certain amount of equity in your home. For people whose homes have dropped in value since they bought them, they may not have equity.

That’s where HARP comes in. If you owe more on your home than it would appraise for, you can refinance to lower your rate or change your term, even if you owe up to double what it’s worth. Although it’s been around for some time now, the latest numbers show that more than 143,000 homeowners could still benefit from the program.

If you’ve been looking to refinance a loan from before May 31, 2009, but you have limited or no equity, HARP may be worth applying for.

We’ll go over how to know if you’re eligible and then we’ll take a look at how much you could save.

Are You Eligible?

As with any loan, in order to qualify for HARP, there are a few special requirements:

  • Fannie Mae or Freddie Mac must own your loan.
  • The loan must have closed prior to May 31, 2009.
  • Your loan-to-value (LTV) ratio, a comparison of your loan balance to the value of your home, must be between 80%–200%. This basically means that if your house is worth $100,000, you can’t owe less than $80,000 or more than $200,000 in order to qualify.
  • Your home has to be a primary residence, second home or an investment property with no more than four units.
  • You have to be current on your mortgage. For the purposes of this program, you can’t have any 30-day late payments in the last six months and only one in the past year.

If these conditions sound like a fit for your situation, you can go ahead and check your eligibility.

Even if you don’t qualify for HARP, there are other loan options that may help.

How Much Could You Save?

If you’re HARP eligible, how much can you really expect to save? Of course this depends on your prior payment relative to current interest rates, but let’s take a look at one hypothetical.

Let’s say you last purchased or refinanced your mortgage around April 2009. Mortgage rates at the time were somewhere in the low 5% range. On a $200,000 loan, if your rate was 5.125% and you were able to refinance to a rate of 4.125% today, you would save nearly $120 per month and more than $43,000 over the term of a 30-year loan.

The holidays are around the corner, and $120 a month is a lot of money that could be used to save for those presents for everyone on your list. It would also be great for a college fund or a boost to your retirement plan.

If you think HARP might be right for you, you can get an online approval through Rocket Mortgage® by Quicken Loans®. If you’d rather get started over the phone, one of our Home Loan Experts would be happy to take your call at (800) 785-4788. Do you have any questions for us? Leave them in the comments.

This Post Has 2 Comments

    1. Hi Judi:

      Unfortunately, we don’t do any financing on manufactured homes. However, if your loan is owned by Fannie Mae or Freddie Mac and you closed it before May 31, 2009, you may be able to find HARP financing through another lender. Good luck!

      Kevin Graham

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