Refinancing a Home
HARP 2.0 May Open the Doors for Borrowers Shut Out of HARP 1.0
Three years after the housing meltdown, millions of homeowners are still struggling with mortgage payments for their upside down homes. Among the initiatives launched by the government to assist homeowners was the Home Affordable Refinance Program which provided relief for borrowers whose equity exceeded their mortgage balance. The problem with HARP was that the requirements were too steep for many people, and few of the borrowers who actually needed the help were able to qualify. Late this year, the government rolled out HARP 2.0 which raises the cap on the loan-to-value which previously sat at 105%. So, now more homeowners can qualify.
Many of the other eligibility requirements remain, such as the requirement that your mortgage is owned by Fannie Mae or Freddie Mac. Also, your payments must be current with none misses in the last year. You also need to check to see if your PMI insurance is a part of your mortgage, because, if it's not, you may not qualify. You can check online to see if your loan is owned by Freddie (www.freddiemac.com/corporate) or Fannie (www.fanniemae.com/loanlookup), and you can check with your lender or your mortgage statement regarding your PMI insurance.
Because Freddie and Fannie need to update their computer systems to handle the new requirements, the new program may not be available until after the beginning of the year. You can check the Freddie Mac website to see a list of lenders who will be participating in the program.