How to Refinance Your Home With HARP Programs

As part of the federally-sponsored Making Home Affordable Program, the Home Affordable Refinance Program (HARP) is designed to help homeowners who may not qualify for a refinance because of negative equity in their homes obtain more favorable mortgage terms. If you're having difficulty refinancing your home, learn what steps to take to determine if the Home Affordable Refinance Program can help you.

Things You'll Need

• Copies of recent mortgage statements
• Assessment of your home's current value
• Proof of income
• List of monthly expenses
• Copies of recent tax returns

Instructions

1. Determine your eligibility. To pre-qualify for the Home Affordable Refinance Program, your loan must be backed by Fannie Mae or Freddie Mac, you must not be more than 30 days late on your mortgage payments, the amount owed to your first mortgage is not more than 125 percent of the property's value, you have income or means to pay, and refinancing will make the loan more affordable in the long term. You may contact Fannie Mae or Freddie Mac to determine if they have guaranteed your loan. Your lender will be able to give you a good faith estimate of your home's current value.

2. Contact your lender and ask for a Home Affordable Refinance Application. You may also apply for a HARP refinance through an outside lender who is approved to do business with either Fannie Mae or Freddie Mac.

3. Fill out the application and return it to the lender. Along with the application, you will need to include statements of your gross monthly income, recent tax returns, information about your second mortgage if you have one, and a list of all other monthly debt payments you currently have. Your lender will determine the value of your home as part of the application process.

4. Stay in touch with your lender and be patient. It will likely take your lender 30 days or longer to look over your application and determine if you qualify for a Home Affordable Refinance. Provide any supporting documentation that they may request. Continue making your mortgage payments on time and in full each month.

5. If your refinance is approved, you will need to sign the new loan documents and pay any applicable fees and/or closing costs, unless you are rolling them into the loan. Get a copy of the new payment schedule and begin making your new monthly payments.

Tips & Warnings

• Depending on the current terms of your loan, refinancing may not alter the amount of your monthly payment.

• If you don't qualify for a refinance under the HARP program, you may need to consider a federal loan modification.

• If you are delinquent on your mortgage, you will not be able to obtain a refinance through the HARP program.

• The program expires June 10, 2010. Your refinance through HARP must be approved on or before this date.

References

• Making Home Affordable
• FTC Consumer Information on Mortgage Modification and Refinancing

Resources

• Fannie Mae
• Freddie Mac