Fannie Mae and Freddie Mac have been participating in a program that allows homeowners to refinance their home even if they are "under water" – meaning the appraised value is not normally high enough to refinance. This program was due to expire at the end of 2016 but has been extended to September 2017.
This program has gone through many changes since it was first introduced, including removing the loan to value ceiling and in some cases, the appraisal requirements. It currently allows homeowners with a loan to value greater than 80% to refinance – in many cases the loan to value may be over 100% and you can still refinance. In order to be eligible, you must have a mortgage owned by Fannie Mae or Freddie Mac, it has to be originated on or before May 31, 2009 and you must be current on your mortgage payments with no late payments in the last six months, and no more than one late in the last 12 months. Borrowers must also benefit from the refinance – such as a reduction in your monthly payment or even going from an adjustable mortgage to a fixed rate mortgage.
Fannie Mae says they have helped over 2 million homeowners with this program, but they think there are at least 300,000 more loans that may be eligible. Rates have increased in the last month, but they may still be lower than the rate of your current mortgage.
Homeowners that did modifications in the last few years may also be eligible for a HARP loan. Many of the modifications require interest rate resets after 5 years, until the loan reaches the market rate that existed at the time of the modification. If you did a modification, you may want to see if you are eligible for a HARP loan and permanently reduce your interest rate.
If you currently own a home that has a mortgage from before 2009, you may want to see if you are eligible to refinance under the HARP loan. This may allow you to save money every month on your home!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc, AnEqual Housing Lender, NMLS#150953 - Email - Website
