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Mortgage Refinancing: Steps to Qualify for the HARP Loan Program

Loan Application FormHARP or Home Affordable Refinance Program is a loan program that aims to help homeowners refinance their mortgages. The federal government, led by the Treasury Department and the Federal Housing Finance Agency, launched it in March 2009. Since then, it has helped over 3.2 million Americans refinance their homes.

The HARP home loan is designed to help those with negative equity, no equity, or limited equity to refinance their mortgages. To date, US agencies estimate that over 600,000 homeowners are still unable to refinance their homes. If your equity is in question, you may be eligible for this program.

But a deadline has been set to refinance under this program. It will be replaced by Fannie Mae and Freddie Mac after September 30, 2017.

Qualifying for HARP

The underwriting process for HARP is the same as the other conventional mortgage systems. Financial documents and loan disclosures should be accomplished and signed. Aside from paper, lenders also require homeowners to have excellent credit score, good assets, and regular incomes.

Other Requirements

Other than these qualifications, there are also other requirements to meet. Fannie Mae or Freddie Mac must be the guarantors or owners of your house. If they are the owners, the mortgage should have been sold to them prior to May 31, 2009. If your house was already refinanced through HARP within March to May 2009, you can’t apply for it again.

You should also be current with your mortgage payments. If there are delays in your payments, 30 days is allowed within the last 6-month period. On the other hand, only one late payment is allowed for the last 12 months.

Finally, your mortgage should have an LTV (loan-to-value) ratio of 80%. If your mortgage has an adjustable rate, the highest LTV is 105%. If it’s fixed rate, there is no maximum limit of LTV.

If you're planning to refinance your mortgage, organize your requirements and paperwork now. Only then can you contact a HARP home loan lender to help you get the refinancing help you need.

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