Know Qualifications for Harp 2.0 Mortgage Refinance Loan Program

The biggest benefit from HARP 2.0 mortgage refinance program is for people who cannot find assistance anywhere, their houses being underwater

Most homeowners looking to refinance their houses at a lower interest rate face their banks’ refusal due to loan being underwater. This means the loan amount owed is higher than the worth of the house. Even responsible borrowers, who bought the house knowing well what they could afford, are also facing trouble paying back the loans. This is where HARP 2.0 refinancing can prove useful to such responsible but troubled buyers.

The first version of the program had certain shortfalls that were corrected, and a revised HARP 2.0 mortgage refinance loan program was introduced. The revised program saw greater participation from people at large and according to figures from Federal Housing Finance Agency, HARP 2.0 refinancing accounted for 20% of the total refinance loans.

The biggest benefit from HARP 2.0 mortgage refinance program comes to people who can’t find assistance anywhere else because their houses are underwater. HARP 2.0 refinancing is the only program that helps them refinance their loans. As against the first version, qualifications for HARP 2.0 refinance are simpler and it also allows borrowers with mortgage insurance to apply for refinance. The program is not only attractive to a larger pool of borrowers but has also come as a relief for the loan originators as they are no longer responsible for the fraud that happened in underwriting of the first loan.

To qualify, you must fulfil HARP 2.0 program requirements such as a mortgage that is owned or guaranteed by Freddie Mac or Fannie Mae, should have been sold on or before May 30, 2009 to Freddie Mac or Fannie Mae, not refinanced previously under HARP (except if from Fannie Mae and refinanced between March and May 2009). In addition, qualifications for HARP 2.0 refinance require you to have a loan-to-value ratio of more than 80% and be current on your payments. Qualifications for HARP 2.0 refinance require you to have a minimum credit score of 620. These loans are ‘full doc’, so you will need adequate proof of employment, income, tax returns, and other assets.

It is possible that your lender offers HARP 2.0 refinancing, but you are not obliged to work only with your lender. You are free to work with any broker or bank. However, as with any other loan, it pays to shop around to understand the offers available. Remember that with HARP 2.0 mortgage refinance program, you will not get extremely low interest rates.