The revamped mortgage refinance program through the Home Affordable Refinance Program (HARP) could help many Orlando homeowners. Many borrowers want to refinance but have been stuck because of loan-to-value ratios, the down housing market, and issues with mortgage insurance. Lenders recently received instructions from the Federal Housing Finance Agency (FHFA) that have removed the caps on homes that are valued for far less than what they were bought for. For homeowners who have been paying their monthly mortgage payments on time but want an opportunity to refinance at today’s lower interest rates, they can now call their lender to see about getting into the HARP program.
The FHFA estimates that it could help 1.8 million homeowners with the revised version of HARP, which has been extended to run through the end of 2013. Lenders can vary how quickly they adopt the changes and the revised HARP program guidelines.
“This new phase of the Home Affordable Refinance Program will help reach more borrowers with negative equity so they can refinance into new Freddie Mac mortgages at today’s historically low-rates,” said Freddie Mac’s CEO Charles Haldeman, Jr. “These changes mark another step on the road to recovery for the nation’s housing market and…in making affordable mortgage financing available to America’s homeowners and future homebuyers.”
The revised HARP removes the 125 percent loan-to-value cap and the need for a new property appraisal as Fannie Mae and Freddie Mac have automated valuation systems to estimate most property values. It also reduces fees for borrowers who refinance with shorter-term 20 year or 15 year mortgages. Borrowers have to be current on their mortgage and have no late payments in the last six months. The original mortgages must have gone through Fannie Mae or Freddie Mac before May 31, 2009 to be eligible. Lenders will also have particular liabilities on the original loans waived when a refinance goes through HARP.
Borrowers should check in with their Orlando home insurance agent to see how a refinance can affect their home’s value and reduce any homeowner’s insurance premium. Homeowners can get guidance on their premiums by reviewing what the current costs are to rebuild the home should a catastrophic incident occur. An insurance agent can show you options to lower your homeowner’s insurance premiums with different deductibles, coverage, and updated home values.