The Home Affordable Refinance Program (HARP) has been extended to June 2012. It is a program that was initiated in 2009 to help homeowners that were upside down on their conventional conforming mortgages to refinance. It was suppose to expire in June 2011, but it has been extended for another year.
The program is for certain mortgages backed by Fannie Mae or Freddie Mac and they must have been securitized prior to June 1, 2009. You can contact either Fannie Mae or Freddie Mac to see if your home is eligible - the easiest way is to go to their websites and you can look up your address. If you are eligible, you may be able to refinance your home even if your home values have dropped. Every lender is slightly different but some will allow you to refinance your home up to 125% of the current value as long as you are current on your mortgage now.
If you currently are not paying mortgage insurance because you had 20% down when you bought your home, you will not have to pay mortgage insurance now - even if your current value is now over 80%.
You have to be employed (or be receiving income - social security, retirement, etc), the lender will verify that you have the income to pay the new mortgage. It is not a program to avoid foreclosure. It is designed to allow homeowners that have lost equity in their homes the ability to refinance their homes at today's lower interest rates.
You can refinance your primary residence or a second home (vacation home), you can also refinance an investment property as long as you bought it as an investment property.
The interest rates on these programs are about the same as traditional refinances and in some cases may be better. Check with your current lender or call and we can let you know what the rates are.
If you are currently paying mortgage insurance, that PMI payment will not go up. However it is more difficult to refinance those loans. Not every investor is willing to refinance mortgages that currently have mortgage insurance. You may have to go to your current servicer and see if they are willing to refinance your mortgage.
You may be able to roll some or all of your closing costs into your mortgage. Some lenders will not go over 95% or 105% of the current appraised value - the most any lender will do is 125% of the appraised value.
If you think you might qualify for this program call and ask about it. Interest rates have dropped slightly again and it may be a good time to refinance your home.
Leslie Vanderwerf, NMLS ID#335509, Advisors Mortgage - Email - Website