November 28th, 2018


The Home Affordable Refinance Program, or 'HARP' for short, has been around since 2009. Since that time, it's helped more than 3.3 million homeowners lower their monthly payments, get extra cash, and improve their financial future in significant ways by offering lower interest rates to those who have underwater mortgages.

But thousands are still eligible, and many of them fail to apply simply because they assume that they can't qualify or they don't understand the basics of HARP. With that in mind, it's worth looking at 7 key things that are worth knowing about this program.

One: Second Mortgages Don't Mean You Can't Use HARP

Having a second mortgage doesn't mean that you can't use HARP. It does, however, mean that you can't combine the two mortgages into a cash out refinance. You'll have to talk to the lender for your second mortgage and make sure that they will grant you permission to replace the existing first lien on the title. Still, it's good to know that you do have options with HARP even with a second mortgage.

Two: No Equity Doesn't Disqualify You

In fact, the whole point of HARP is to make it possible for those with no equity to refinance. The new HARP guidelines allow homeowners to refinance no matter how far underwater their current mortgage is.

Three: Just Because You Were Turned Down Once Doesn't Mean You Don't Qualify

HARP has changed their guidelines over the years, and many lenders actually use their own in-house variations on the HARP rules. These in-house variations mean that you could be able to get a refinance from one bank even though a different one turned you down.

Four: Harp Isn't Just For Primary Homes

This is one that surprises many people, who often assume that HARP can only be used for a primary residence. However, the truth is that HARP allows you to refinance investment properties, second homes, and vacation properties. It isn't just limited to your primary residence.

Five: You Can Use Any HARP Approved Lender

Another common misconception is that since the lender who handles your loan doesn't offer HARP, you can't refinance using it. But HARP 2.0 made it possible for homeowners to choose any lender approved by the program when they refinance. There are thousands to choose from, so you aren't left forced to use just one.

Six: HARP Is Not For Those Behind On Their Payments

It's important to note that HARP isn't for those who are about to have their home foreclosed on or who are struggling with delinquent mortgage payments. In fact, you must be current on your mortgage and have no late payments in the last six months - and only one late payment in the last 12 months - in order to qualify for a HARP loan.

Seven: HARP Insurance Requirements Are Worth Looking At

Even if your loan has private mortgage insurance, you can still use HARP 2.0. However, many banks won't offer private mortgage insurance and it's very common to be turned down by multiple lenders before you find one that will work with you.

The Bottom Line

Mortgage rates change frequently, and different lenders have different rates in place. It's important to not only talk to a lender that you can trust but to shop around and make sure that you find the best option for your needs. Our team knows that the process can be confusing at times, and we're here and ready to help make it easier.