Harp Mortgage Refinance: Loan Modification Help is Called HAMP
When economic times are good, we look at refinance options as a way to pull cash out of our homes or get a better rate than what we signed up for. Now homeowners who are struggling just to stay in their homes can look at refinancing as a way to get relief from underwater mortgages or mortgage payments that they just can’t make anymore. In addition to HAMP (Home Affordable Modification Program), we have Harp Mortgage Refinance ). This arm of the Obama administration’s mortgage stimulus plan gives more than 9 million struggling homeowners the option of refinancing at a 4.5% fixed rate. Here are the rules:
The amount remaining on the mortgage must be for less than $729,500. The home mortgage must have been closed on and finalized before January 1, 2009. The homeowner must live in the home to be refinanced as a primary residence.
Personal income levels must be verified through the use of tax returns or pay stubs. A letter of “Financial Hardship” written and signed by the mortgage holder is needed. Hardships may include loss of income, job, high medical bills or other unexpected or extreme expenses leading to financial hardship.
Your mortgage payment (including principal, interest, taxes, insurance, home owners association dues) must exceed 31% of your gross monthly pre-tax income; You can not afford your current mortgage payment due to a financial hardship that can be documented. What Is The HARP Program? The HARP Program is one of the loan modification programs intended to help those homeowners who want to refinance their mortgage but cannot because their homes value has decreased enough to prevent them from qualifying for normal Fannie Mae and Freddie Mac conventional lending loan to value guidelines. A loan changes with HARP may be the answer.
HARP Eligibility Requirements- Your mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac. (See below to contact Fannie Mae or Freddie Mac); When applying for the HARP Program loan modification help you must be current on your mortgage payments. Current is defined as not more than 30 days late on your mortgage payment in the last 12 months. If you have had the mortgage for less than 12 months, then you cannot have missed a payment; Your mortgage balance cannot exceed 125% of your homes value;
Your income is sufficient to pay back the new mortgage payment; Your mortgage loan modification must improve the long term stability and affordability of your current mortgage. Example: your current mortgage is a 10 year Interest Only Mortgage and you are making a loan modification to a 30 year fixed rate mortgage.
Learn more about Obama Mortgage Relief Plan Qualifications.
