Refinance with HARP and Save!
If you are underwater on your mortgage but consistently making your scheduled monthly payments, you may be able to qualify for much lower mortgage rates with the Home Affordable Refinance Program (HARP).
What is HARP/HARP 2.0?
HARP is the Home Affordable Refinance Program. It began in 2009 and is intended to allow underwater homeowners who are current on their Freddie Mac- or Fannie Mae-owned mortgages to refinance their loans at today's low rates.
When the housing bubble burst in late 2006, home prices fell by about a third on average. This left millions of homeowners underwater, owing more on their mortgages than their homes were worth. These homeowners were generally precluded from refinancing because of their high loan-to-value ratios. At the same time, mortgage rates fell to record lows. HARP allows high-LTV homeowners to refinance at today's low rates.
In 2012 the HARP program underwent a major revision, which allows even more borrowers to take advantage of the program. The updated program is known as HARP 2.0.
You must be current on your mortgage and not have more than one late payment over the past twelve months, and your loan must have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009. Other eligibility and underwriting guidelines will apply, but these are largely dependent upon your individual financial situation.
For example, if your loan amount is $200,000 and your original home value of $250,000 has dropped down to $215,000, your loan-to-value ratio when you refinance will be 93%. Normally, that would mean you would be stuck with mortgage insurance. Even worse, if you have a credit score between 620 and 680, you may not be able to even get mortgage insurance, and if even if you can the mortgage insurance monthly premium will be much higher than any savings you get from refinancing.
But, with the HARP program, you can refinance that $200,000 loan and even get a higher loan amount to cover closing costs. At Total Mortgage, there is no loan-to-value restriction in most circumstances (call for more details). This means that it doesn’t matter how far underwater you are, you may still be able to refinance. And you will not need mortgage insurance even though your loan-to-value ratio is greater than 80%.
Fannie Mae DU Refi/DU Refi Plus
Fannie Mae’s version of the HARP is known as DU Refi/Du Refi+. The "DU" in "DU Refi Plus" stands for "desktop underwriter." This is a computer program used by mortgage lenders to help with Fannie HARP loans.
Freddie Mac Relief Refinance
Relief Refinance is the name for Freddie Mac’s implementation of HARP. For all intents and purposes, HARP, DU Refi/Refi+, and Relief Refinance all refer to the same program.