Mortgage rates are really low right now. Maybe a lack of equity has prevented you from taking advantage and refinancing your home – but we may have just the solution for you.
The Home Affordable Refinance Program (HARP) was intended for homeowners who owe more than their home is worth or who have low equity. This may be your opportunity to lower your rate, but be aware that the government program ends December 31, 2018.
While the program has been around since 2009, lots of Americans are still eligible to take advantage and lock into a lower rate. With that in mind, let’s go over the details of the program and how you can get started.
It’s a great time to refinance into a rate near historical lows, but before you take advantage of HARP, there are a few key restrictions you need to know about:
- Fannie Mae or Freddie Mac must own your mortgage.
- The loan has to have been sold to Fannie Mae or Freddie Mac prior to May 31, 2009.
- The loan-to-value (LTV) ratio, a comparison of your loan balance to the actual market value of your home, must be between 80% and 200%.
- You have to be current on your mortgage payments. For the purposes of this program, that means only having one late payment in the last year and none in the last six months prior to closing your refinance.
- You’re generally limited to refinancing once under HARP. The lone exception to this is if you refinanced a Fannie Mae loan through HARP between March and May 2009. If that’s the case, you might be able to refinance a second time through the program.
If these qualifications sound like a match to you, you can check your eligibility here.
Even if you don’t qualify for HARP in particular, we may have other options to lower your payment based on your financial situation.
How Much Could You Save?
We’re telling you that you could save money, but how much are we really talking about here? That’s a fair question. Let’s dig into the numbers with an example.
Let’s say you last bought or refinanced your home in April 2009. Rates at the time hovered around the low 5% range. If your rate was 5.125% on a 30-year mortgage and you refinanced today to a rate of 4.125%, you would save $120 per month. You would also save over $43,000 in mortgage interest.
If you’d like to try this comparison with your own numbers, you can check out our amortization calculator.
If you’d like to look into your options to refinance to lower your payment through HARP or any other program, you can go right and get started online or contact one of our Home Loan Experts at (888) 980-6716.
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