If Freddie Mac owns your mortgage and you are timely with your mortgage payments but unable to refinance because you have little or no equity in the home, you may be able to refinance to a lower interest rate or more stable mortgage through the federal Home Affordable Refinance Program (HARP). This program is designed for homeowners who have not been able to refinance due to a decline in the value of their home. Visit our secure Loan Look-up tool to see if Freddie Mac owns your loan.
Freddie Mac's implementation of HARP may help you obtain a monthly payment you can afford, and must result in one or more of the following:
- A reduction in your interest rate and or your monthly principal and interest mortgage payment.
- A fixed-rate mortgage in place of an adjustable-rate, interest-only, or balloon/reset mortgage.
- A reduction in the term of your mortgage (e.g., from 30 years to 15 years).
If your loan is owned by Freddie Mac, there are two options to help you if you are making timely mortgage payments, but have been unable to refinance due to declining property values:
- Refinance through your existing lender (the company to which you send your monthly mortgage payments) if they are participating*. Since your lender already has the necessary files and documents, there are fewer requalification steps unless your principal and interest payment goes up more than 20 percent. No new appraisal is required in certain cases. Find out if your lender offers HARP.
- Refinance through a different participating lender like Forum Mortgage Bancorp. You may choose to pursue a refinance from a participating lender different than your existing lender. Because a different lender will not have your information or documents, they will need to requalify and re-underwrite your new loan. A new appraisal may not be required in certain cases.
You may be eligible for HARP if you:
- Own a 1- to 4-unit home as your primary residence, a 1-unit second home, or a 1- to 4-unit investment property.
- Are timely making your mortgage payments.
- Choose a fixed-rate mortgage or an adjustable-rate mortgage for your new mortgage. If you choose a fixed-rate mortgage, you can refinance the entire amount of your existing mortgage regardless of the value of your home, but if you choose an adjustable-rate mortgage, you cannot finance more than 105 percent of your home's value*. If your existing mortgage is a fixed-rate mortgage, your new mortgage must also be a fixed-rate mortgage.
- Choose a mortgage solution that can improve the long-term affordability or stability of your mortgage with the refinance.
Mortgage insurance is not required if your existing mortgage does not have mortgage insurance, regardless of whether the loan-to-value ratio (ratio of the amount being borrowed to the market value of the property) is greater than 80 percent on the new mortgage.
Contact us today to discuss the Home Affordable Refinance Program.