HARP Program

For Many the HARP Program Has Been Homeowners Saving Grace


HARPShockingly most homeowners aren’t taking advantage of the Home Affordable Refinance Program (HARP). For someone that is struggling to pay their mortgage every month and has the opportunity to lower their rate is crazy not to dive in and at least investigate this gold mind. Some statistics show the reason homeowners haven’t taken advantage of this sweet deal is because homeowners are sick of refinancing and having to gather all the documents needed. In most cases, the homeowner doesn’t even realize the fact that he or she qualifies.

The Government

HARPIn 2009, the government did some research and found that by doing away with private mortgage insurance (PMI) saved the typical homeowner $3000 annually. The government also realized that homeowners that are not struggling to pay their mortgage every month have some wiggle room to spend elsewhere. This, of course, helps the economy and is how the Home Affordable Refinance Program was born.

Obama Refinance

HARPThe government’s goal was to have 7 million homeowners moving forward with the HARP to help our economy get back on its feet. By 2011, HARP had only reached out to 1 million homeowners. Something had to be done. This is where the Obama Refinance comes into play, also known as the HARP 2.0. The government decided to make the HARP more appealing by doing away with the loan-to-value as well. So, not only are you saving a bunch of money every month but the qualifications are well in your favor.

The Good and the Bad

HARPWe are all aware that what goes up must come down. There is always going to be a catch to saving thousands of dollars. With the HARP you must know that it is important that you do some research on lender and closing fees. Some states will charge you quite a bit in closing cost, which then makes no sense to go with the HARP. Say you are going to save $3000 a year by doing a HARP but the fees and closing cost are well over that amount. Some lenders will put it on the back of the loan but is that what you really want to do? Then there are some lenders and states that might only charge you $700 in fees and closing costs. In that case, you would have the closing costs paid off in just a few months and paying much less on your mortgage.