When the housing industry went belly up a few years ago, many homeowners suddenly found that their homes were worth less than what they originally paid for them.
This left them with negative equity and only contributed to the plummeting state of the American economy. In an effort to stem the flow of negative equity, the US government extended and created a new program called HARP.
This type of loan allows homeowners to get a lower interest rate or a shorter term for their loan, or change the type of loan that they have. There’s no credit score requirement to take advantage of this, and the only requirement is that you purchased your home on or after 2009 and have been mostly current with your payments. This program isn’t going to be around forever, so if you believe you might qualify, you need to take advantage before December of 2016.
HARP loans help homeowners in that it lowers the monthly payment, allowing homeowners to finally be able to build up equity in their home. Appraisals are not required for these loans, so the closing costs are lowered. Interest rates are lowered, as well as securing a fixed rate so that terms won’t change over with the life of the loan.