HARP 2.0 Not Just for Underwater Borrowers!
Posted 09/10/2012 by Anonymous
The Home Affordable Refinance Program, also known as HARP, is available for mortgages that were sold to Fannie Mae or Freddie Mac prior to June 1, 2009. Millions of homeowners are eligible for HARP, especially with the updates now known as HARP 2.0, which eliminated the loan to value caps. By doing so, this eliminated the need of an appraisal and opened the program up to borrowers who were deeply underwater with over 125% LTVs. Although it is designed for those whose home value is less than the mortgage amount, HARP 2.0 is not just for underwater borrowers.
While HARP 2.0 has reached a large amount of underwater borrowers and given them the opportunity to refinance to lower mortgage rates, it has also been used by many others who are not underwater.
Borrowers who have loan to value ratios of 80% or more are also eligible for HARP 2.0.
In other words, borrowers cannot owe LESS than 80% of the property’s value on their mortgage. Those borrowers who owe 80% to 95% are not considered underwater borrowers. This is the normal loan to value ratios for many mortgages that carry private mortgage insurance.
Many borrowers who are not underwater and fall into this special category will use HARP for refinancing because of the simplicity of the guidelines.
There is no appraisal necessary and an income verification is not needed.
Lenders will make sure that the mortgage payments have been made on time and no payments have been missed in the last year. This makes it quicker for these borrowers as compared to a traditional mortgage refinance which requires full documentation and an up to date appraisal.