Q: We have a 5.25%, 30 year fixed, owe $147,000 through Indymac. I am underwater, have never been late on a payment and have credit scores in the low 800's. I am told we cannot get a HARP loan because we have to have 5% equity in our property. Is there any help out there?
A: Not all lenders/servicers participate in the HARP program, which is voluntary. If your loan is owned or backed by Fannie Mae or Freddie Mac and your servicer doesn't participate, you are free to go to another lender who is active in the program.
Among the items which make your loan eligible for a HARP refinance are:
- Your mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009
- Your mortgage hasn’t already been refinanced through HARP, “unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009”
- Your loan-to-value ratio must be greater than 80 percent
- You have to be current on your mortgage
To read the full eligibility requirements, go to www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx and click on the “Eligibility” link for the basics, then “Program Availability” for the lookup tool for your loan. If you are eligible and your servicer doesn't participate, you can start to shop around for a mortgage lender who will write you a new loan. As with other offers, participation in the program and rates and fees will vary from place to place, so make sure you scour your market well.
A 25-year expert observer of the mortgage and consumer debt markets, Keith Gumbinger has been cited in thousands of articles covering a wide range of consumer finance and economic topics in outlets ranging from the Wall Street Journal to the Bottom Line newsletters. He has been a featured guest on national broadcasts for CNN, CNBC, ABC, CBS and NBC television networks and has been heard on NPR and other national and local radio programs. Keith is the primary researcher and writer for HSH.com's MarketTrends newsletter and has authored or co-authored a number of consumer guides on mortgages, home equity, refinancing and more.