Eligibility Requirements for the Home Affordable Refinance Program (HARP)

The HARP or Home Affordable Refinance Program is one of the two key features of the Homeowner Affordability and Stability Plan which is aimed at giving affordable and low cost mortgage refinance and restructuring programs. The current fiscal crisis managed to wreak havoc on the financial condition and capabilities of the normal wage earner. Recent job cuts are not much of a help either. The plan was to help current home owners to keep their homes while gaining access to an opportunity that will help ease the burden of mortgage payments. The HARP program in particular is targeted towards homeowners who need to refinance their existing mortgage or loan. The program allows refinancing and restructuring options even if the mortgage balance is more than 80% of the total value of the home. Banks and lenders often refuse to give low interest rates for first time borrowers if the amount exceeds 80% of the value of the home.

Interest Rates and how they Affect Mortgage Payments

Banks and lenders often refuse to give a fixed rate of interest especially for first time mortgage borrowers. The same goes to those who want a low interest rate as well. Under the HARP plan, home owners who desire to refinance to a fixed rate or low interest mortgage may do so provided that the eligibility requirements are met.

Eligibility Requirements for HARP

If you happen to meet the following requirements then you may be eligible to apply for a Home Affordable Refinance Program.

• You are the owner/occupant of a one or four unit home and serve as your primary place of residence.
• The mortgage/loan on your property is owned or guaranteed by Freddie Mac or Fannie Mae.
• You never missed a mortgage payment in the last 12 months or have not exceeded a maximum period of 30 days when conducting mortgage payments.
• Your primary mortgage does not exceed 105% of the total value of your home. If it does, you will have to pay an amount to scale down the value of your mortgage to the 105% level.
• You have a reasonable amount of financial capability to pay the new, refinanced loan.

Remember that a debt refinancing or restructuring plan should be able to improve the overall affordability and long term stability of your existing loan. The HARP plan was designed to appeal to credit worthy customers in securing a more affordable payment for their mortgage.

Advantages of the HARP Plan

Current homeowners who entered a mortgage plan with a higher rate of interest than the prevailing market or current rate will see an immediate decline in their monthly payments under HARP. Those who entered into a variable interest mortgage will not see an immediate effect on their monthly payments but will enjoy huge savings by paying a lower amount over the entire life of the loan/mortgage.

The Home Affordable Refinance Program is a great way for the average citizen to avail of lower rates for their monthly mortgage payments. If you happen to meet all of the requirements mentioned above then take advantage of the HARP plan ad savor the opportunity to keep your home and avoid a painful foreclosure in the future.