At first, I was overwhelmed by ads talking about HARP and refinancing, which can be really complicated. Some lenders are using the foot-in-the-door technique to rope you into mortgage products that won’t actually help you. Some companies are trying to tell you that they will secure your HARP eligibility if you pay up front. That’s not how it works.
There are mortgage programs like HARP that will help take care of you and protect you. Your monthly payments will reflect your situation now more than in the past.
HARP is a free program. The only costs you would pay are by going through a lender that has fees for starting a loan, which many do. HARP expires December 31, 2018.
So, you’ve been paying your mortgage every month. You’re a sensible person that has your head on your shoulders. Maybe you heard that comparable homes in your neighborhood have been selling at a lower rate than you thought they would, but maybe not. What does this mean for you?
Taking Advantage of HARP
HARP is a government-insured program also known as the Home Affordability Refinance Program. It underwent changes this year to better help people take advantage of a streamlined process making refinancing quick and easy. HARP 2.0 will positively affect millions of homeowners that were previously ineligible.
We used to think that HARP-eligible borrowers were “underwater” meaning they owed more than their home was worth, but wasn’t always true. In fact, since the inception date of HARP (April 2009), 56% of all those who had completed a HARP refinance had Loan-to-Value (LTV) ratios of 80% to 105% of the home’s worth, meaning: they didn’t actually owe more on their mortgage than their home was currently worth. For the majority of the Quicken Loans business for that same amount of time (April 2009 to 2013), our clients had an average LTV of 82%. The government data shows that the majority of people in the US are not underwater in their homes.
Why HARP was Created
Remember that housing crisis back in the 2000s? A lot of home values drastically fell. You may not even know that yours fell, but refinancing could have been previously really hard or even selling your house because you may owe more on your mortgage than the house is worth.
Let’s say you bought your house for $250,000 back in 2006. The housing market hit, but you have been making payments (however difficult) and currently owe $200,000. The problem is, your home is currently worth $180,000 meaning that if you sell your house, you need to pay back the bank the entire balance of the loan PLUS $20,000 out of pocket. This happened for a lot of people and was especially hard for people that lost their jobs. When they tried to sell their house, it might have ended in foreclosure when they were unable to pay out-of-pocket costs. A lot of people even willingly chose to foreclose on their homes because it meant they could cut their loss on a bad investment and take the needed time to build up their credit again. It’s really not these peoples’ fault that this happened. It was a whirlwind of bad storms put together. That’s why the government now watches the housing market so closely and implemented programs to help those who need debt relief.
What Does This Mean for the New HARP Program?
The government noted that there are currently 2.5 million people that could benefit from HARP, but aren’t taking advantage of it. Maybe you were told you didn’t qualify before, but you should know that eligibility has changed. We know that HARP has been claimed the most by people living in California, Florida, Michigan, Illinois, Arizona, Georgia, Ohio, Texas, North Carolina, New Jersey, Nevada, Minnesota, Washington, Ohio and Maryland.
You can save tens of thousands of dollars, seriously!
What Are HARP’s Benefits?
- You don’t have to be underwater for HARP to benefit you. Better yet, HARP’s program is streamlined, meaning it will be far faster than a normal refinance, have lower costs (sometimes none!) and has less paperwork.
- Quicken Loans no longer requires documents of retirement accounts, bonds and stocks, or liquid assets.
- You can have a more stable mortgage product.
- If you do not pay Private Mortgage Insurance (PMI) right now, you won’t be paying PMI when you refinance through HARP.
- HARP is the only way that homeowners who don’t have equity or have little equity in their homes can refinance.
It’s easy to see if you qualify for HARP, click here.
As the economy turns around, programs like HARP won’t last forever. The program only extends until 2015, but there is no guarantee on future interest rates.
Why Quicken Loans?
Quicken Loans is a trusted lender and the authority on HARP because we have the best client experience possible. J.D. Power awarded Quicken Loans the highest in customer satisfaction for primary mortgage origination in the U.S., three years in a row and we have an A+ Better Business Bureau rating. Simply put, we believe in doing the right thing.
Quicken Loans will help educate you about HARP, the program and process, what it takes to qualify and a way to instantly talk with a banker to get you started. We will make the refinance process painless with our online tools and a supportive team to close your loan quickly.
By refinancing through HARP and Quicken Loans, you can save money on your monthly mortgage payments and on the overall amount of interest paid by being able to refinance at today’s near-historically low rates. Homeowners with loans before May 2009 typically have an interest rate at 5% or higher, so refinancing will save you thousands in interest payments during the life of your loan. This program is here to help you and we’re engineered to AMAZE. Take advantage of near-historically low rates.
Do you have any questions about HARP that may seem confusing? We’d love to help answer them!
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