Don’t underestimate the value of a HARP refinance when it comes to getting a mortgage payment that’s much more realistic for your budget. You may have heard that refinancing with HARP is difficult, and that has been true for some homeowners, but it’s definitely not the case for everyone. If you can get a HARP refinance, you’ll have a better payment and interest rate, so you can stay in your home and continue to pay for it without so much hardship. It’s a much better choice than a short sale or foreclosure, and can reduce your stress levels. Not only can you get peace of mind, but you can also get the opportunity to put your financial life back on the right track. That can be a great feeling. Here are seven ways to tell if you’re ready for a HARP refinance.
1) Did you buy at the top of the market?
If you bought your home right at the top of the market, when home prices and interest rates were at their peak, you’re probably in a difficult position now. A lot of people lost their homes and their jobs, but if you’ve managed to get through the recession and are still in your home that doesn’t mean that everything’s fine. The chances are high that you owe much more on your home than what it’s currently worth, and that you need some relief from the high payments and the excessive mortgage balance.
2) How much is your interest rate?
One of the biggest problems with the housing bubble was the prices, and the other was the interest rate. People were paying way too much for their homes, but they were also stuck with very high mortgage payments because of the large rates of interest that were being charged. If your interest rate is at least one point higher than today’s rates, you could likely benefit from a refinance. If you bought at the market’s height, the chances are that your interest rate may be several points higher than the current rate, driving up your mortgage payment.
3) Are you behind on your payments?
When purchasing a home the last thing you want to do is get behind on your payments. That can cause you to lose your home, and it can damage your credit, too. If you’re gotten behind on your payments because the home’s purchase price and interest rate was so high, or because your financial circumstances have changed, a HARP refinance could be the perfect thing for you. It will give you the opportunity to get a fresh start, and get caught up on your mortgage so you’re not behind and struggling with late payment fees and other kinds of problems.
4) Has your credit been damaged?
For most people, the housing bubble damaged their credit. Because they bought so high and then the market essentially crashed, they were left trying to pick up the pieces. Many of them lost jobs, and because of that they couldn’t pay their mortgage payments anymore. They had to let something go, and in an effort to keep their houses some of their other debts were neglected. It all added up to a perfect storm of damaged credit that can take time to repair and make it difficult to try to refinance or get help. The HARP program works with that.
5) Do you owe way more than your house is worth?
If you’re planning to refinance with something other than HARP, you have to have enough value in your home to get the loan to go through. That’s where a lot of people who want a better interest rate run into trouble. They owe so much more than their house’s current value that they can’t get any other lender to help them get the home refinanced at a lower rate. With HARP, the goal is to reduce the principal balance and the interest rate, making what you’re paying for your home much more realistic from a financial standpoint.
6) What has happened to home values in your area?
If the home values in your area have plummeted from where they were when you bought your home, you’re certainly not alone. Many people bought at the top of the market, and they’re now struggling to get through each month and make their mortgage payment. While values have started to come back up, a number of homeowners probably still owe a lot more than their houses are actually worth. If that’s a problem you face, you may want to look into a HARP refinance to see if you can get some relief from your housing difficulties.
7) Do you have a low to moderate income?
With a HARP refinance, you have a higher chance to be able to keep your home. You could also see a reduction in what you’re paying each month and how much you’ll have to pay for the total purchase price. Having a lower to moderate level of income can help you get through the HARP program. People who can easily pay their mortgages, even if they paid too much for their house, can have a hard time getting refinanced. For those who are struggling significantly, though, the HARP program may be what they need to get back on their feet once again. By talking to your lender and checking into the program, you can find out if you qualify.
2 Point Highlight
With a HARP refinance, you have a higher chance to be able to keep your home.
Don’t underestimate the value of a HARP refinance when it comes to getting a mortgage payment that’s much more realistic for your budget.
