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What Is A HARP Mortgage Loan?

By Eric Goodwill

What is a HARP mortgage loan?  Read here to fully understand if you could benefit from a HARP mortgage loan.

With interest rates at an all-time low, many people could benefit by refinancing their mortgage.  Unfortunately, due to tightened lending restriction, many people no longer qualify for a refinance through a traditional mortgage lender.  For these people, getting a HARP mortgage refinance could be a great option to refinance and take advantage of the low interest rates.  There are several requirements that need to be met in order to qualify for a HAPR refinance.

Required LTV

The first requirement to qualify for a HARP mortgage loan refinance is to meet the specified LTV requirements.  Due to tightened lending restriction, many mortgage lenders refuse to approve mortgage refinances unless the loan to value is less than 90%.  Due to falling housing prices, many people who could benefit from a refinance, no longer have adequate equity in their home.  The HARP program raises the required LTV up to 125% or less.

Must Be Current On Mortgage

The second requirement to qualify for a HARP mortgage loan refinance is that they borrower must be current on their mortgage.  While the HARP program is designed to help people refinance their mortgage, it will not be willing to accept responsibility for an individual who has a history of missing mortgage payments.  In most situations, the borrower must have made their mortgage on time for at least 12 consecutive months to qualify for a HARP loan.

Owned by Freddie or Fannie

The third requirement to qualify for a HARP mortgage loan refinance is that the loan must be owned by either Freddie Mac or Fannie Mae.  The HARP a program was partially designed to prevent homeowner’s from defaulting on loans owned by the two mortgage giants.  Because of this, only loans owned by those companies qualify for a HARP refinance.

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