Mortgage Modification Sponsored By The Government, What Is Harp

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HARP, the government Home Affordable Refinance Program has consistently grown and expanded the help provided as more power and finances are invested in this program.
If you are in danger of losing your home or are struggling to make payments HARP could provide you with the break you need to get back on your feet.
If you are in that situation you probably have many questions you would like answering. How can I know if I am eligible for aid under HARP? How do I know if I will actually benefit from a HARP loan refinance? Or probably the scariest, I owe more on my property that it is worth, do I still qualify for a refinance with HARP?

What are the requirements to qualify for HARP?
1.)   Your loan must be owned or guaranteed by Fannie Mae or Freddie Mac. Most people don’t actually know if this is the case and unfortunately in many of the hardest hit areas by the economy in the United Sates Freddie and Fannie don’t guarantee a large percentage of the loans. For you to find out if your loan is guaranteed or owned by Freddie and Fannie you can either contact your mortgage provider or find out at their respective websites.
For Fannie Mae 1-800-7FANNIE (8am to 8pm EST). www.fanniemae.com/loanlookup . For Freddie Mac contact -800-FREDDIE (8am to 8pm EST)
o   www.freddiemac.com/mymortgage
2.)   The amount you owe on your FIRST mortgage cannot exceed 125% of the value of your home. This figure has been increased a few times in an effort to include those that really need the HARP program.
3.)   You must be current on your mortgage payments. Current means not having being later than 30 days on your payment in the last months or never having missed a payment if you have had the loan for less than 12 months. It seems strange that a mortgage aid program will only allow people that are “current” on their payments to participate, however the idea of the program is to provide long term help allowing homeowners that can reasonably rearrange their finances to pay their mortgage not provide emergency help to people who simply cannot meet their mortgage payments.
4.)   The loan modification must improve the overall long term affordability of the loan. This can me an different things depending on the mortgage. For instance if you switch from a variable interest or ARM mortgage to a fixed interest mortgage your initial payments might rise a little but your long term stability and ability to pay for your mortgage may increase.

How can you know if you a HARP loan modification will benefit you? The key is to understand the cost and benefits of your loan and to get that information you need to documents, a “Good Faith Estimate” and a Truth in Lending Statement”. The two disclosures will spell out for your new interest rate, mortgage payments, fees and other expenses. You can then compare the “new deal” with your current mortgage to assess if it is actually beneficial for you.

I hope this article has answered some of your questions on HARP. However if you are thinking of applying for help you have probably got many more questions, the best thing you can do is visit HARP’s website at www.makinghomeaffordable.gov where you will find these and other questions answered.