In today’s economy, it’s common for homeowners to be upside down on their mortgage. Mortgage rates are as low as they’ve ever been which looks like a check in the plus column. But most homeowners wanting to refinance can’t because their home isn’t even worth as much as they owe. Once again, there’s a stalemate in the home financing market where nothing can be done. Or is there an option?
The only option we have is one we create. The government revised their refinancing program for homeowners stuck in a state of negative equity. Traditionally, homeowners need at least 20 percent equity on the home in order to qualify for a re-fi. The federally approved Home Affordable Refinance Program (HARP) leapfrogs over that requirement altogether. The details of the new program have yet to be released but equity minimums seem to have vanished into thin air. On November 15th, 2011, the new HARP will be completed and available for all to scrutinize.
In order to qualify for this program:
- You need to be current on your house payments for the past 6 months, and have no more than one delinquent payment over the last 12 months.
- The mortgage must be currently Fannie Mae or Freddie Mac held, and it had to be owned by Fannie Mae or Freddie Mac prior to June 1, 2009 as well. Note that your mortgage lender more than likely sold your mortgage after you closed escrow on the home. Talk to your mortgage lender to find out if Fannie Mae or Freddie Mac owns your mortgage loan.
- You can only use HARP once. If you used a prior release of HARP, you don’t qualify.
- You can include vacation homes and second homes in the program
- Your new loan needs to “conform.” Conform limits vary from region to region and state to state. To check your conform limits in your area, click here.
Researchers are uncertain as to how many homeowners this new program will help. Some skeptics think as little as a quarter million borrowers will receive a small impact of assistance, but President Obama’s administration is more optimistic.