Sunday, November 25, 2012

The New 2012 Home Affordable Refinance Program (HARP) for Kentucky Mortgages






The New 2012 Home Affordable Refinance Program (HARP) for Kentucky Mortgages

Upside down on your Kentucky  home? 

Do you currently owe more on your home then what it is worth due to the current housing market?  If you do, you are not alone.  There are thousands of homeowners across the country that are in the same financial position.  These same people would love to reduce their interest rate, save finance charges, and lower their monthly payments but feel they can’t since their home has significantly reduced in value.  In some cases, families may owe 50% more then what their home is worth!  For example, a family may owe $150,000.00 on their home that they purchased 4 years ago.  At the time they purchased their home, the home was worth $200,000.00.  Now, due to foreclosure, short sales, and the current economic situation we are facing in theUS, their home is now worth $100,000.00.   A tough situation that now has a solution. 
On October 24, 2011, the Federal Housing Finance Agency, Fannie Mae, and Freddie Mac announced upcoming changes in the HARP program (Home Affordable Refinance Program) to attract more eligible home owners to refinance their home and save their hard earned income. 
The new enhancements to this program are as follows:

You May Be Eligible For the  HARP Program If:

1) Your home loan is owned or guaranteed by Fannie Mae or Freddie Mac.  
2) Your loan was sold to Fannie Mae or Freddie Mac before May 31, 2009.
3) You are current on your mortgage payments.
4) You owe more than your home is worth, or is there minimal equity in your home.
5) You have made all of your mortgage payments on time in the last 6 months.
6) You have had NO sixty (60) day late payments in the past 12 months.



  • Eliminate certain risk-based fees for home owners who refinance into shorter term mortgage and lowering fees for others
  • REMOVING the current 125% loan to value (what is your LTV?  refer to the formula at the bottom of this article) ceiling for fixed rate mortgages backed by Fannie Mae and Freddie Mac.  This is huge as it allows borrowers who fit in the example illustrated in the beginning of this article to now take advantage of these lower interest rates through a refinance.  Before, the home owner would just be turned down for financing.  Now, if they owe 50% more then what their home is worth, they could save through rate reductions.
  • Eliminating the need for a new appraisal where there is a reliable automated valuation model (AVM) providing a credible current market estimate of the property value.
So how do you know if you qualify for this program?  Here are the guidelines:
  • You have a mortgage owned or guaranteed by Fannie Mae or Freddie Mac.
  • Owe more then your home is worth.
  • You do not have an FHA, VA or USDA loan.
  • You are current on your mortgage payments and have not been more than 30 days late making a payment over the last year.
  • The refinance will improve the long-term affordability or stability of your mortgage.
  • You have the ability to make the new payments.
  • Must have a loan originally sold to Fannie or Freddie on or before May 31, 2009
The finalized details associated with the removal of the current 125% LTV ceiling and other guidelines will be published on or before 11/15/2011.  Until then, you can refer to the link below for further research.
Do you have a Fannie Mae or Freddie Mac loan?  Find out here.  Very simple.
http://www.FannieMae.com/loanlookup/ or call 1-800-732-6643
https://www.FreddieMac.com/corporate/ or call 1-800-373-3343

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