Many homeowners are facing a similar dilemma; they owe more on their mortgage then their house is worth. This “upside down” or “underwater” mortgage problem is affecting those in all areas of the United States, including typically strong housing markets such as New Jersey and Pennsylvania. The good news is there is hope!
The government has recently expanded their HARP guidelines enabling many more homeowners the opportunity to refinance into some of the lowest rates in history. The HARP program, which stands for the Home Affordable Refinance Program, allows responsible homeowners (those who have paid on-time) with an opportunity to get new loans.
Until HARP 2.0 was announced homeowners with an underwater mortgage had few options available to them. They could continue to pay, attempt to get a mortgage modification, or simply default on their loan. With HARP you don’t have to worry about an appraisal coming in too low, because appraisals are rarely required when refinancing with HARP.
There are a few requirements to obtaining a HARP loan, but they are mostly reasonable and much easier than your typical mortgage refinance. You need to make sure your mortgage payment hasn’t been late for the past 12 months and your existing mortgage must be owned by Fannie Mae or Freddie Mac. These are by far the two most important qualification aspects of the HARP mortgage program. There are other requirements and a qualified Loan Officer can help you understand what they are.