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Harp Refinance Program Helps Millions With No Equity Refinance
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Harp Refinance Program Helps Millions With No Equity Refinance

On November 15th, 2011, the government announced sweeping changes to the Freddie Mac and Fannie Mae (HARP) Home Affordable Refinance Program. Millions of people who previously thought that they were stuck, unable to refinance because of recent depreciation of their home's value can now QUALIFY for a refinance at historically low mortgage interest rates!

Many investors will take part in this new regulation. Individual investors/lenders have the option of whether or not to take part. However, lenders that do decide to get involved will be looked upon favorably by the public.

Some highlights of the program are:

  • Home Affordable Refinance Program is extended through 2013
  • Homeowners must have a loan owned by Fannie Mae or Freddie Mac
  • Homeowner must be current on their mortgage, allowing for one late payment in the previous 12 months
  • NO LOAN to value limits (except ARMs that have a cap of 105%)
  • No Appraisal Required in many instances
  • Reduced Closing Costs
  • Reduced credit score requirements

What does this mean to the average consumer? It means that most Americans can now drastically lower their interest rates and save THOUSANDS in interest over the life of their loan. It also means that homeowners will have a better chance of building equity faster, being able to pay more to principal instead of interest.

DON'T BE SURPRISED if your local bank turns you down! Remember, LENDERS HAVE THE OPTION AS to whether or not they will participate in the program. It is unlikely that the bank on the corner will want to take the risk and get involved. After all, most lenders are struggling to exist, hoping desperately not to get shut down by the Feds.

There are places to go! Federal Credit Unions and Brokers will lend on this program. Finding the right broker might take some time, but they are still out there. They will have access to the best possible loan programs and will take into account your entire financial picture when figuring out which loan would be best for you!

Consider switching from a 30 year fixed to a 15 year mortgage. If your interest rate is currently over 6%, you'd be surprised how small the difference in payment will be on a monthly basis. If you can afford the delta, the interest savings will be huge, almost the cost of a whole new house!

Other things to consider: If you don't think that your credit score is quite where it should be, explore your mortgage options anyway. Most lenders these days have access to all types of credit repair companies. No matter what you do, MAKE SURE THAT YOU TAKE ADVANTAGE of today's low interest rates. Whatever steps you have to take to refinance will be well worth it in the long run.


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