Is a Home Affordable Refinance right for me?

Fannie Mae and Freddie Mac have recently made changes to the Home Affordable Refinance Program (HARP) which might help you qualify to jump on these great deals! With HARP a homeowner can refinance to a lower rate and term, even if they owe more than the home is worth. HARP was first introduced as part of the 2009 stimulus package to help home owners who were struggling to make payments refinance to a lower rate. Initially the allowable loan to value ratio (LTV) was set at 105%, this has since been increased to 125% to potentially accommodate more borrowers.

What is HARP?

This program formally known as the Home Affordable Refinance Program is designed to assist borrowers who have stayed current with their payments but with the downturn of the market now owe more than the house is currently worth. The goal of the Home Affordable Refinance Program is to make monthly mortgage payments more affordable even if there is not sufficient equity for a traditional refinance. HARP 2.0 can lower your monthly mortgage payments and change your loan to a stable FIXED rate mortgage.

How do I calculate the Loan to Value ratio (LTV)?

Step 1:

Check with your mortgage provider to see how much you currently owe on your existing mortgage.

Step 2:

Determine the value of your house. If you haven’t had an appraisal recently, estimate the best you can.

Step 3:

The math calculation is completed by dividing the amount you owe on the house by what the house is worth. For example if your home is worth $250,000 and you owe $265,000, then you divide $265,000 by $250,000. To get the percent multiply by 100. So $265,000/$250,000*100= 106% LTV

Why would you choose HARP?

  • Appraisal Often Waived
  • NO loan to value limit
  • Maximum of 105% Loan to Value for Adjustable Rate Mortgages
  • Competitive interest rates
  • Reduce your monthly payments
  • Save money by paying less in interest
  • Stability of a fixed-rate product
  • Options for Primary homes, Second homes, and investment properties
  • NO mortgage insurance required if none is in place currently
  • Loans with and without Mortgage Insurance (MI) are eligible
  • Terms 8-20 Receive a credit of .25 (up to 105% LTV)

You might be eligible for HARP if:

  • Your mortgage payments are current and no late payment in the past 6 months, no more than one late payment in the past 12 months.
  • Existing loan was originated on or before May31st. 2009
  • You have not refinanced under a past HARP program
  • Your first mortgage has a Loan to Value (LTV) of 80% or more
  • Your existing loan is owned or guaranteed by Freddie Mac or Fannie Mae
  • To check eligibility visit
  • Visit Freddie Mac
  • Visit Fannie Mae

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