Explore our blog for insights on buying, financing, remodeling, and taking care of your home.
In 2012 the federal government tweaked a mortgage relief program to help more homeowners. The goal is to assist people who owe more on their home than it's worth, who are paying high interest rates. The hope is to allow these homeowners to refinance into a lower interest rate, regardless of the value of the home. This could save some homeowners a good chunk of change on their monthly house payments. And the program ends this year.
Mortgages seem so complicated on the surface that many people let opportunities to save money slip past them. It makes sense to investigate options instead of assuming that mortgage help isn't available for underwater homeowners. Here are a few "myth-busters" about President Obama's Home Affordable Refinance Program 2 (HARP 2) to help make the process easier to understand.
HARP is the short form for the home affordable refinance program. It is a US federal Government initiative that was started in March 2009 with the goal of helping underwater home owners to refinance their mortgages.
Here's a question a homeowner recently asked in connection to HARP 2: "Can I add my wife to the mortgage if I refinance with this HARP thing?" It's a common situation. The borrower took out a mortgage on his house, then got married a few years later. Now he's looking at an interest rate higher than his neighbors but can't refinance because of falling home values. that's why he's looking at HARP 2 as a solution. Of course, now he wants to add his wife to the mortgage. Well, he can. According to the Fannie Mae guidelines for HARP 2 "Borrowers may be added in the new transaction provided the original borrowers remain on the loan."
Many homeowners in today's housing market are underwater in their mortgages and haven't had anywhere to turn for relief. That's about to change. New financial calculators will give lenders like AmeriFirst Home Mortgage the chance to help homeowners who owe more than their homes are worth refinance into lower interest rates. Lower rates will mean monthly savings and a little breathing room for a lot of homeowners. After all, people buying homes now are getting historically low interest rates, while you're in a house that's losing value while the interest rates fall around you. But since your value fell, you can't refinance. That just doesn't seem fair. Enter the Home Affordable Refinance Program part two, or "HARP 2.0" as it's called.