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Questions on the basic concepts and challenges facing all homeowners seeking financial relief, organized into topics and programs for quick reference – refinancing, foreclosure prevention, loan modification and more.
These categorized questions and answers cover basic information about Making Home Affordable and more detailed information about MHA's most popular programs.
The rate will be based on market rates in effect at the time of the refinance and the homeowner will be subject to any associated points and fees quoted by your lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans must have no prepayment penalties or balloon payments.
Can I get cash out of a HARP refinance to pay other debts?
Call your mortgage lender, or any lender approved to do business with Fannie Mae or Freddie Mac, and ask for a Home Affordable Refinance application. The number is on your monthly mortgage bill or coupon book. Please be patient yet persistent. Your lender could be handling a large volume of inquiries about the program and it may take some time before they are ready to process your application. In the meantime, it will help your lender and speed up the application process if you gather some information and documents before you call. It will help your lender if you gather some information and documents before you call. Generally, you will need the following:
The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
The mortgage must have been sold to Freddie Mac or Fannie Mae on or before May 31, 2009.
The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May 2009.
You must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past twelve months.
The current loan-to-value (LTV) ratio must be more than 80%.
I am delinquent on my mortgage. Will I qualify for a refinance under HARP?
No. Homeowners must be current on the mortgage at the time of the refinance, with no late payments in the past six months and no more than one late payment in the past twelve months. Contact your servicer to see if a modification under the Home Affordable Modification Program is an option for you.
Will I need mortgage insurance on a HARP refinance?
If your existing loan has private mortgage insurance, you will need the same amount of insurance coverage for a refinance under HARP. If your existing loan does not have private mortgage insurance, it will not be required as part of a refinance under HARP.
Eligible homeowners who are current on their mortgages but have been unable to take advantage of today's lower interest rates because their homes have decreased in value, may now have the opportunity to refinance. Through a refinance under HARP, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they own or that they guaranteed in mortgage backed securities.
How do I know if I am eligible for a refinance under HARP?
You are the owner-occupant of a one- to four-unit home.
The loan on your property is owned or guaranteed by Fannie Mae or Freddie Mac (See "How do I know if my loan is owned or has been guaranteed by Fannie Mae or Freddie Mac?").
At the time you apply, you are current on your mortgage payments ("Current" generally means that you have not been more than 30 days late on your mortgage payment in the last 12 months; or, if you have had the loan for less than 12 months, you have never missed a payment).
The amount you owe on your first lien mortgage does not exceed 125% of the current market value of your property.
You have a reasonable ability to pay the new mortgage payments.
The refinance improves the long term affordability or stability of your loan. (See "Will refinancing lower my payments? How might HARP benefit me?")
Will refinancing lower my payments? How might HARP benefit me?
The objective of a refinance under HARP is to provide creditworthy homeowners who have shown a commitment to paying their mortgage the opportunity to get into a new mortgage with better terms.
Homeowners whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Homeowners who are paying interest only, who have a low introductory rate that will increase in the future, or who face a balloon payment may not see their current payment go down if they refinance to a fixed rate and payment. These homeowners, however, could save a great deal of money by reducing the amount of interest you pay over the life of the loan.
Refinancing into a more stable fixed-rate loan product and avoiding future mortgage payment increases would likely improve your ability to sustain your mortgage payments over the long-term. When you submit a loan application, your lender will give you a "Good Faith Estimate" and a "Truth in Lending Statement" that includes your new interest rate, mortgage payment, and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.
Will a refinance under HARP reduce the amount that I owe on my loan?
No. The objective of a refinance under HARP is to help homeowners get into more stable or more affordable loans. Refinancing will not reduce the principal amount you owe to the first lien mortgage holder or any other debt you owe. (See "How will I know if a refinance under HARP will improve the long-term affordability or stability of my loan?")
How will I know if a refinance under HARP will improve the long-term affordability or stability of my loan?
When you submit a loan application, your lender will give you a "Good Faith Estimate" and a "Truth in Lending Statement" that includes your new interest rate, mortgage payment, and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.
How do I know if my loan is owned or has been guaranteed by Fannie Mae or Freddie Mac?
Ask your mortgage lender or servicer. Also, both Fannie Mae and Freddie Mac have established toll-free telephone numbers and web submission processes to make this data available. Homeowners can enter information to determine if either agency owns or guaranteed the loan. This information is not a guarantee of eligibility for a refinance under HARP, as other qualifying criteria must also be met.