Government program helps homeowners save more than $3,300 per year on their mortgage
This little known secret can save you big money
With mortgage rates at astronomically low levels, the time to maximize your savings and refinance your home is now. There’s a little-known government program called the Home Affordable Refinance Plan® (HARP) that allows homeowners to refinance at staggeringly low rates, saving Americans on average $3,300 per year.
It was recently announced that more than 3.3 million homeowners have save nearly $12.6 Billion with the help of HARP loans.
HARP was created to help homeowners refinance their homes into a more stable mortgage. HARP makes it simple to move into a mortgage with lower, fixed interest rates or a loan with a shorter terms. Often HARP affords homeowners the best of both worlds– a lower fixed rate and a shorter term loan.
There are an estimated 429,000 homeowners still eligible for the program.
Even if you've previously applied and been turned down, it's worth exploring again. In May of 2015, federal officials made the application process simpler, loosened appraisal and income verification standards, and abolished loan-to-value caps, making it easier than ever for you to refinance your mortgage and save.
The Time to Act is Now!
The program is set to expire at the end of the year on December 31st, 2016, so now’s the time to consider refinancing with HARP. We’re in a very low interest rate environment, and waiting until the program ends could be a major financial mistake, as the Federal Reserve has indicated that they plan on increasing interest rates. With higher interest rates, loans will get more expensive, so the sooner you refinance with HARP, the more likely you’ll maximize your savings.
Everyday HARP lenders are working with new homeowners to lower their monthly payments, in turn helping them save money and improve their finances.
How HARP helps save money
Firstly, HARP allows people who are facing high mortgage payments to refinance. If you struggle to make payments, if you owe more than your house is worth, or if you’re worried about foreclosure HARP was designed for you. But you don’t have to be in financial peril to refinance with HARP.
Why is it easier to refinance with HARP?
- Loans in the program do not require private mortgage insurance (PMI), which means a savings of $100 per month or more for many homeowners.
- There is no required appraisal or loan underwriting.
- Lower (or no!) fees for borrowers, especially those who take shorter-term loans.
- Looser restrictions when it comes to verifying applicants’ income.
- Requires less paperwork than a conventional refinance.
Why is HARP ending?
In 2012, the Federal government attempted to expand the program even further, but the plan failed. Since then, policymakers have been eager to end the program and limit government intervention in the mortgage market.
However, government agencies did decide to extend HARP until the end of 2016 to give homeowners one last chance to get out of burdensome home loans– a hangover from the toxic days before 2008. Pressure to end the program is mounting, so regulators have settled on ending the program after this year is over.
Where do I apply?
Most banks across the country offer HARP loans, in fact, there are over a hundred approved lenders. Under HARP, you’re not required to remain with your existing lender, the program allows you to refinance with any of their approved lenders.
As with any major financial purchase, it's always in your best interest to shop around. Rates and fees can vary significantly between lenders. If you have good credit, you might find the best rates from a local savings lender rather than a national bank or mortgage broker.
A recent study found that by comparing 3 lenders the average homeowner saves more than $16,000 over the life of a loan. And the more you compare, the better it gets. Comparing 5 lenders saves an average of $24,000. Add that to the $3,300 average savings by using HARP, and now you’re seriously reducing your mortgage.
Comparison-shopping with over a hundred approved lenders can be a daunting task. That’s why there are services set up to help you. Just like comparing flights, hotels or shoes, internet companies can help you shop for mortgage lenders. At LendingTree, we have one of the largest lender networks in the country, many of which have been approved to participate in the HARP refinance program.
LendingTree can help you compare hundreds of offers all at once, to narrow down your search and find the best lender for you. We won’t just help you compare different interest rates—we'll also compare closing costs, upfront fees, and more. Plus, with LendingTree, getting mortgage offers is simple and completely free. Just fill out a simple online form and wey’ll match you with up to 5 lenders that match your needs.