Learn how to refinance a mortgage with HARP

Dear Angie: What can you tell me about the HARP refinance program? Is it true that the mortgage holder would initiate the refinancing and the homeowner would not have to pay any closing costs, as those are paid from the mortgage servicer company?
– Chuck J., Cedar Rapids, Ia.

Dear Chuck: You’re referring to the federal Home Affordable Refinance Program, which is designed to help homeowners refinance their mortgage even if they owe more on their home than it’s worth.

As explained by the U.S. Departments of the Treasury and Housing & Urban Development, the program enables homeowners to refinance their homes at a lower interest rate, thereby reducing their monthly mortgage payment and, possibly, mortgage terms. The program offers assistance to consumers with loans that are guaranteed or owned by either Fannie Mae or Freddie Mac and who are not more than 30 days late in paying their mortgage in the past 12 months and who do not owe more than 125 percent of their home’s current market value.

You can initiate this process on your own. Visit http://www.makinghomesaffordable.org/home-affordable-refinance-program.html to learn more. You can also contact your mortgage lender to find out if they participate in the HARP program. To qualify for participation in the program, lenders must do business with Fannie Mae or Freddie Mac. Be prepared to have and share information related to your income, income taxes, mortgage and other debt.

If you want to participate in this program with a lender, I recommend working with a local mortgage lender who, in addition to qualifying to participate, has a good reputation and with whom you feel comfortable. Whether you work with the program on your own or with a lender, you will still be responsible for closing costs. You can, however, finance those costs into your new loan.

The HARP program has been extended before and could be extended again, but it is currently set to expire June 30, 2012.

Angie Hicks is the founder of Angie’s List, a provider of reviews you can trust on contractors, doctors, dentists and other service professionals. More than 1 million consumers across the U.S. use Angie’s List to help make tough hiring decisions easier.


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