Maybe you’ve been thinking about taking advantage of a lower rate to drop that monthly payment but a lack of equity has been stopping you.
The U.S. government’s Home Affordable Refinance Program (HARP) may be the solution to your problem. The deadline to take advantage of the program has just been extended to September 30, 2017.
Despite the extension, it makes a lot of sense to refinance now, while rates remain at or near historic lows.
I know it can seem like we’re harping on HARP sometimes, but we do so for good reason. It’s one of the only programs that will allow you to refinance even if you owe more on your home than it’s worth.
HARP has been around a long time, but more than 5.3 million eligible homeowners have yet to take advantage of the program, according to data from the Urban Institute.
Before you can get a lower monthly payment, there are a few requirements you need to know about:
- The mortgage must be owned by Fannie Mae or Freddie Mac.
- The loan must have been sold to Fannie Mae or Freddie Mac before May 31, 2009.
- Your loan-to-value (LTV) ratio – which compares the outstanding balance on your home with its market value – must be between 80% and 200%.
- You must be current on your mortgage. That means only having one late payment in the last year and none in the last six months prior to refinancing.
- You can only refinance under HARP once, unless you refinanced a Fannie Mae loan under HARP between March and May 2009, in which case, you may be able to refinance under HARP a second time.
If you think you qualify, you can check your eligibility here.
Even if you don’t qualify under HARP, we may have other options for lowering your payment that fit your situation.
Rates Are Really Low
If you listen to the radio or TV at all, you’ve probably been inundated with this message, but I really can’t say it enough. Rates remain at or near historic lows, and they probably won’t be going lower anytime soon.
Just how low are they? Let’s say you got a mortgage in April 2009. Rates would have been in the low 5% range if you paid a minimal amount in prepaid interest.
If you refinance today, you can get a rate in the high 3% range for a minimal upfront investment in terms of prepaid interest points.
If your rate went from 5.125% to 3.75% on a $150,000 mortgage, you could save yourself over $120 a month. That’s $120 that could be put toward your child’s college fund, your retirement or whatever you please.
If you would like to take advantage of these HARP savings, you’ll have to do so quickly to take advantage of today’s ultra-low rates. Check out our program page or call (888) 728-4702.
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