Refinancing a mortgage can have several benefits to homeowners, such as lowering their interest rate to save money over the life of the loan. But, due to the current housing crisis, many homeowners have experienced a reduction in the value of their homes, which has prevented them from refinancing with a conventional home loan. The Home Affordable Refinance Program, which is part of the Home Affordable Modification Program, can be a solution for those homeowners who currently have mortgages through Fannie Mae or Freddie Mac.
HARP Extension Allows More Homeowners to Refinance Their Mortgages
HARP, which was scheduled to end in June of this year, has been extended to June 2011, giving more homeowners the opportunity to take advantage of the program. HARP allows homeowners who are ineligible for traditional mortgage refinances to refinance their current mortgages into a more affordable FHA loan. In 2009, about 190,000 homeowners were able to take advantage of an FHA loan modification to receive a lower interest rate on their mortgage. With the new FHA loan, homeowners can receive a lower, fixed interest rate, which will most likely lower their monthly mortgage payment. The homeowner can then save money each month and over time without having to worry about their rate changing.
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