Everything you need to know about HARP

Sept. 30, 2014 - PRLog -- Per Sally Stribling top producing Real Estate Agent for Coldwell Banker Schmitt in the upper Fl Keys, "The refinancing option, HARP, came into effect in 2009 with the aim of keeping homeowners in their homes during the national economic downturn and beyond.

The Home Affordable Refinance Program, also known as the Making Homes Affordable plan, is one initiated by the federal government to help underwater homeowners. Being "underwater" simply means owing more on the mortgage than a property's actual market value.

HARP promises to make payments more affordable and applicants do not even have to be employed in order to qualify. However, like anything else, it's not free or necessarily cheap; though, it is a viable solution for many who cannot keep-up with their monthly mortgage obligation. Here's what you need to know about HARP.

Fannie Mae and Freddie Mac Mortgages Pre-Qualify

In order to be eligible, your home loan must be backed by Fannie Mae or Freddie Mac. Many people mistakenly believe that their bank is the entity which "holds the note" on their mortgage. In reality, very few banks actually do this and the vast majority only service home loans. That means the banks collect mortgage payments but do not back loans.

FHA Loans

If neither Freddie Mac or Fannie Mae backs your mortgage and you have an FHA loan, then you can go a different route, through the FHA Streamline Refinance program. This too, helps underwater homeowners refinance their properties to keep them in their homes.

Foreclosure Aid and Loan-to-Value Ratio

It is important to understand that HARP is not a way to avoid foreclosure. You must be current or up-to-date on your payments and not in arrears. However, it does not matter how far underwater you might be in your home loan versus your property's value. There is no limit on the loan-to-value ratio.

Home Appraisals

Most people who are familiar with refinancing might know that banks usually require a home appraisal. With HARP, there is an appraisal, but it's not like the one traditionally used. It's called an "automated valuation model" and it is not a physical appraisal.

Sally Stribling, REALTOR with Coldwell Banker Schmitt Real Estate company, specializes in the sale of fine Homes and Condos in The Florida Keys.

Sally provides buyers and sellers with in-depth professional assistance in the sale and purchase of residential property. If you are interested in buying or selling a home, and want the professional assistance of a seasoned expert, who will work diligently in an effort to satisfy your needs, please call Sally anytime at 305-453-7552