Many homeowners still struggle today with high loan rates on big mortgages based on formerly bloated home values. Qualified homeowners are taking advantage of historically low refinance rates to lower their monthly mortgage costs. However, millions are “under water” with loans that are higher than their homes’ current value, and therefore do not have enough equity in their homes for a traditional refinancing transaction.

For underwater homeowners, there is hope in HARP, the Home Affordable Refinance Program. HARP was initiated in 2009 for those whose mortgages are owned by government entities Fannie Mae or Freddie Mac. The federal government has recently liberalized the qualification guidelines so that more homeowners can participate, lower their mortgage rates, and pay down their loans more efficiently.

What’s New with Harp?
The overall goal in the revamped HARP 2.0 program, which ends December 31, 2013, is to allow more eligible borrowers and lenders to participate more easily. The basics are that the Federal Housing Finance Agency (FHFA), which regulates Fannie & Freddie, has removed the ceiling on the accepted loan-to-value (LTV) ratio-the percentage of the loan amount to the property’s value. High LTVs= greater risk to lenders so this figure determines fees that borrowers are charged for their loans. Formerly the LTV ceiling to qualify for HARP was a whopping 125%. In fact, In some cases an appraisal is not even required!

To qualify for HARP, homeowners must meet all the program criteria including:
* A Fannie Mae or Freddie Mac loan-sold to either entity on or before May 31, 2009.
* The current loan-to-value ratio must be at least 80% .
* Current on their mortgage with no late payments in the last 6 months and only one late payment in the past 12 months.

HARP 2.0 has been released and guidelines do vary from lender to lender, so contact your mortgage professional for more information and to see if you can qualify.

Robert Snyder
Mortgage Advisor
Silex Financial Group, Inc.
Cell: 973.495.8925
Fax: 973.966.1063
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