Have you been unable to get traditional refinancing even when you are not behind on your mortgage payments?  The reason may be because the value of your home has declined. This is when you are eligible for HARP mortgage loans. It is designed to help you get a new, more affordable, more stable mortgage. For millions of home owners in recent years, the term ‘housing crisis' is a term everyone is used to by now. If a person owes more on his home than it's worth, through no fault of his own, he is underwater.  And the U.S Department of Housing and Urban Development along with the Treasury Department in March 2009 created the Home Affordable Refinance Program (HARP). It allows the homeowners who are current on their mortgage to refinance at today's low rates.

 To qualify for a HARP loan, you need to qualify certain eligibility criteria as mentioned below.

• Your loan must be owned by Fannie Mae or Freddy Mac- this is the most important determining factor. To know, you can search for the Freddie Mac or Fannie Mae loan look-up tool. If you don't get a match you don't qualify for the same. But the look up tool is not always accurate.

 

• You must be current on your mortgage- to qualify; you cannot be late on your mortgage. This program is for the ones who have kept their mortgage current but are unable to refinance due to the negative equity of their home or investment property.

 

• The loan must have been sold an transferred on or before may 31, 2009- if your loan closed on or before May 31st, 2009 and the lender that funded the mortgage did not sell or "transfer" to Fannie or Freddie until after the cutoff date, then you will not qualify for the same.

 

• You must be able to financially qualify- you have to show the ability to repay the new loan. The lender does not want to fund a loan they consider risky and will most likely default.

  It must be a benefit to the borrower- you need to ask the right questions to the lender and ensure that he is just focused on the payment and commission and not what is best for you. How long will it take to realize the savings if you refinance into a HARP 2 loan? How long will it take to realize the savings if you refinance into a HARP 2 loan? What is your amortization schedule in 3 years, 5 years etc? When will you be at the breakeven point where you can sell the home and get out bases on the current value? If you decide to move and rent out your property, will the rental income be enough to cover the monthly payments on the new loan? Is a short sale what you really need not a HARP 2 refinance?