The Home Affordable Refinance Program (HARP®), a federal program launched in 2009, was designed to help homeowners who owe more on their mortgage than their home is worth take advantage of lower mortgage rates and other refinance benefits.
HARP enables borrowers with little to no equity to save in two ways:
Scenario A on a $200,000 loan: Lower interest rate = Lower monthly payment
|Year||Average Interest Rate (30-Year Fixed-Rate Mortgage)||Mortgage Payment|
Scenario B on a $200,000 loan: Refinancing to a shorter term = Long-term savings*
|Year||Average Interest Rate||Mortgage Payment||Life of Loan Cost|
|2005||5.87% (30-year fixed-rate mortgage)||$1,182|
|Today||2.81% (15-year fixed-rate mortgage)||$1,363**|
In this instance, the homeowner could save $180,344 over the life of the loan: $129,450 from the lower interest rate and $50,894 from the shorter term.
More than 3.4 million families have already benefited from HARP and you could too. If you are current on your payments and your mortgage is owned by Freddie Mac or Fannie Mae, get started now by following these steps: