HARP, or the Home Affordable Refinance Program offers borrowers the ability to refinance their homes without worrying about private mortgage insurance (PMI), high closing fees and costs, and even a home appraisal.
Make sure your existing mortgage is backed by either Freddie Mac or Fannie Mae
Freddie Mac and Fannie Mae offer an online lookup tool that allows borrowers to determine which entity backs their loans. If you don’t find your mortgage listed on either site, then you’re not eligible for the HARP loan program.
Ensure that you’re current on your home loan
Whether it’s an adjustable rate mortgage or a fixed rate home loan, lenders require that you have settled your past six monthly mortgage payments on time. Also, you’re only allowed one late payment in the previous year. Take note that the lender would verify this information using your credit report, so make sure you don’t lie about this on your application.
Check if your existing home loan is old enough
Only home loans that were “securitized” before June 1, 2009 are eligible for a HARP loan. Your home loan should have started any time before that date. Check your home loan’s closing documents for this. Do take note, however, that because it could take 60 days for a Freddie Mac or Fannie Mae home loan to be securitized, even if the start date of your home loan is near June time limit, your home loan might still be considered ineligible.
Determine if you have mortgage insurance
HARP is developed to help borrowers regardless if they have mortgage insurance or not. Your HARP refinance loan should have the same coverage if your existing loan has mortgage insurance.
Prepare your application documents
HARP home loans need to be underwritten like any other home loan. This means that you would have to submit various documents, such as your bank statements, pay stubs, driver’s license, W-2s, and homeowner’s insurance details. You’d also have to submit several years of tax returns for income verification if you are self-employed.
Simply put, if you take ample time to check your eligibility and prepare the necessary documents required for application, you could save plenty of time and stress, and feel confident knowing that you’ll soon be refinancing your mortgage to one that you could comfortably afford.
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