June 30, 2017
The Home Affordable Refinance Program (HARP) is one of the two key programs established by the federal government to help homeowners affected by the recent subprime mortgage crisis. The beneficiaries of these two programs are those whose home values have fallen below their mortgage amounts (commonly known as being "underwater"). These two programs target homeowners who are:
Defaulting on Payments – The Home Affordable Mortgage Program (HAMP) was created for homeowners who had missed payments and were in imminent danger of foreclosure. This program expired on December 31, 2016.Current on Payments – In this case, you have sufficient financial means to avoid foreclosure, but aren't able to secure refinancing to lower payments or save on interest. This is where HARP may be music to your ears.
Although the primary target is the underwater homeowner, you don't have to be underwater to qualify. However, you can't delay too long – the program is scheduled to end on September 30, 2017.
The point of the HARP program is to reward homeowners who have made their payments diligently with the opportunity to refinance under better loan terms than they would be able to get with their current loan-to-value (LTV) ratio. The refinancing does not reduce your principal amount, but it may result in lower monthly payments, or in the same payments with a savings on interest over the life of the loan. If you want to reduce your interest payments and lower your debt, try the free Debt Optimizer by MoneyTips.