Unfortunately, many homeowners are unaware of a special government refinance program designed to save money and make refinancing easier. Called the “Home Affordable Refinance Program”, otherwise referred to simply as HARP, it was originally launched during the early part of 2009 when it was passed by President Obama. However, today less than 0.5 percent of homeowners use it.
In fact, as part of a survey conducted to ask homeowners what they know about this government refinance program, the majority admit to having never heart of it. Ultimately, that means there are many people missing out on tremendous savings.
With HARP, a homeowner has the ability to secure a new mortgage loan, one that is more affordable and stable. By taking advantage of this “once in a lifetime” bailout, millions of homeowners in the United States would have the opportunity to save significant money. Through HARP, cost savings can be as much as $3,000 a year on mortgage payments.
The kicker to HARP is that 2015 is the last year it will be offered. Although the program is coming to an end, it is still possible to secure extremely low interest rates.
Key Benefits of HARP
- Saving money is the main reason that HARP is so advantageous but there are other benefits to consider. For example, someone who qualifies for HARP refinancing could potentially eliminate up to 15 years of payments, which in turn saves on interest. In addition, a homeowner can switch to a reduced monthly payment and refinancing is possible at interest rates now at historical lows.
- HARP costs absolutely nothing. Passed by the President to help middle-class homeowners, the primary focus of the program was to provide relief for homeowners who owe less than $625,000 on a mortgage.
Why is HARP so Covert?
There are actually several different reasons that few people even know about HARP.
- For one thing, the program has had little promotion
- There is also the issue of distrusting the government, especially after the latest housing market and financial crisis
- More notably, lenders do not want homeowners to benefit from the program because it allows homeowners to switch lenders, something not possible before. As a result, banks are at risk for losing millions of dollars.
Regardless of the reasons that few people are aware of HARP and its many benefits, this is a viable government program still available through 2015. With this program, homeowners have the option of switching from a mortgage loan with a current 6.25 percent interest rate to one locked in at 3.25 percent. That change alone saves tremendous money, which in turn eases the financial burden.
Just as when searching for the best initial mortgage loan, anyone interested in taking advantage of HARP will need to shop around for the best lender. It pays to look at different possibilities and always ask pertinent questions. There are also a number of online services available that match a homeowner with the right lender at no charge.