First off, what is HARP?
It stands for Home Affordable Refinance Program, and was designed to help homeowners who have been unable to obtain traditional refinancing because the value of their home has declined.
So who offers HARP?
The majority of lenders offer HARP loans, although each lender will differ in their guidelines.
How can a HARP loan benefit Ohio homeowners?
As we all know, home values have tanked in the last few years. Many people purchased homes with 5%, 3%, NO Downpayment over the last 3-5 years. Assuming that your home has lost 5% of its value, you probably owe close to what the home is worth. Not many options available for Ohio Homeowners in that situation. That is where HARP comes in.
There are 2 versions, one for loans that are currently insured by Fannie Mae, and one for loans that are currently insured by Freddie Mac. The guidelines are fairly similar between the two.
Lets say your current loan is insured by Fannie Mae, and you owe $200,000 and the home is worth $180,000. That would put you at 111% financing (or Loan to Value). You would be eligible for a HARP Refinance utilizing Fannie Mae’s DU Refi Plus program.
What are the rates like?
Rates for the HARP program are no different than those for a normal Conforming refinance. There are some different adjustments based on credit score, loan term (30 year, 20 year, 15 year, etc.), and for the Loan to Value (loan amount compared to value of the home). Each situation is different, and you would be best served speaking to a Loan Officer regardign your specific situation.
What about closing costs?
Same as above, the closing costs for a HARP refinance are no different than those for a normal Conforming refinance.
Whats the catch?
There isn’t one.
One thing I pay close attention to for my clients in Ohio is the overall benefit.
If someone has been in there 30 year fixed loan for 3 years, it wouldn’t make sense for them to go back to a 30 year (losing 3 years) and saving $50 per month.
However, if we could take them to a 25 year fixed loan, with little to no closing costs and save them $75 per month. That is a win win. Knock 2 years off the loan, save $75 per month, with little closing costs.
As with any loan program each situation is different. You would be best served by contacting a Loan Officer and discussing your specific situation to get the best information.
