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What Is Harp - Home Affordable Refinance Program
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What is Harp - Home Affordable Refinance Program

What is Harp?

HARP stands for Home affordable Refinance Program. It is a program that was enacted by the government to try and help homeowners who are making their mortgage payment, but could not refinance due to their homes' depreciation. It can be very frustrating; people all around the country are walking away from their homes, not paying, living "rent free" while others are trying to make ends meet, paying their mortgage notes on time every month.

Along comes HARP. The rules of HARP are pretty simple. Basically, If you have a first mortgage only, it doesn't really matter what you owe on your house. As long as you have been current on your loan for 6 of the last 12 months (one late in the first 6 months is ok) and you have a job, you would probably be a good candidate for a HARP Refinance program. If you have a first and a second mortgage, the rules get a little trickier. The second mortgage lender has to agree to subordinate, or let you refinance the first mortgage while their position stays the same. However, most companies are allowing it because they figure the lower the payment on the first, the better the chance that a homeowner won't default on their second.

The HARP program is getting pretty popular lately because of how low mortgage interest rates have gone. An average rate on a 15 year fixed rate mortgage is around 3.375-3.625%, depending on where you are looking. Interest rates on 30 year fixed rate loans are around 4-4.25%. In my experience, Brokers generally have access to lower rates than your local bank might. People who otherwise thought that they didn't have a chance to refinance are now seeing light at the end of the tunnel.

I'm not sure if HARP is the answer to America's housing trouble's prayers, but it's a good start. If the government would do something to ease up on credit restrictions, the plan would help even further. Consumers that are looking for a refinance solution and are considering a HARP loan should shop around and look for the best deal. If looking online, make sure that the website has ample information about the HARP program. The Broker or Banker that you decide to go with should seem educated about all aspects of the new HARP program and should understand all of its complexities. If not, they probably would try and put you into a different loan program that maybe wouldn't benefit you as much. A true HARP professional will be able to tell you in one phone call whether or not you would qualify for the HARP program and if it is the right program for your financial needs


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