If you’re underwater on your conforming, conventional mortgage, you may be eligible to refinance without paying down principal and without having to pay mortgage insurance.
If you meet the following criteria, you could qualify to refinance your home into a more affordable, fixed rate loan.
1. Did your purchase your home before May 31, 2009?
2. Do you owe less than $729,750.00?
3. Do you live in your house?
4. Do you want to keep your home?
5. Do you have income?
If you answer YES to all the above questions, you could qualify for this program.
Fannie Mae and Freddie Mac have “lookup” forms on their respective websites. If your mortgage is held by Fannie Mae or Freddie Mac, give that information to your lender. If not, you may still be eligible for a regular refinance to lower rates. Or, if your mortgage is insured by the Federal Housing Authority (FHA), use the FHA Streamline Refinance Program. The FHA Streamline Refinance helps underwater homeowners, too.
The government’s Home Affordable Refinance Program II started in April 2009, and the latest changes was rolled out by the Federal Home Finance Agency on October 24, 2011, and confirmed by Fannie Mae and Freddie Mac on November 15, 2011. The November 15 announcement included comprehensive rules for the new HARP, which people in the industry are calling “HARP 2.0.”
In HARP 2.0, Fannie Mae removes the ability to repay from the H.A.R.P. Program. That means homeowners who don’t make enough money to cover for the payment will still be able to refinance their property as long as they have been making their payments on time for the last six months, and they don’t have more than one late payment in the last four months. Secondly, your loan to value limit (LTV) , too, is not going to be an issue to qualify for the H.A.R.P refinance program. Consider the following, a homeowner who has a big payment because of high interest rates (sometimes up to 9%), will now have the ability to refinance their home no matter how upside down they are, because the LTV limit will be removed, so they could be 125% upside down, 150%, even 200%, and still qualify. The same HARP criteria for eligibility mentioned above apply to HARP 2.0.