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With the housing crisis seemingly behind us, many homeowners are bouncing back and the government programs put in place to help those homeowners are falling out of the national mindset. But can you still use these programs if your home is still in trouble?

If you owe more on your mortgage than your house is worth and have heard of the HARP program, chances are you want to get in on it. To determine if you qualify for HARP, whether it could help you and how to get started, read on.

What Is HARP?

HARP, or the Home Affordable Refinance Program, is designed to help people refinance home loans even if a home’s value has fallen below what they owe on their mortgage. It was established in March 2009 after many homeowners who had been paying their mortgages as agreed were unable to refinance because home values had fallen so much. Basically, despite months or years of paying on time, these people found themselves underwater on their mortgages. HARP provides specialized refinancing that allows you to get lower interest rates and lower monthly mortgage payments through a federal program as opposed to a bank or other mortgage lender.

Eligibility Requirements

There are certain eligibility requirements you must meet in order to qualify for HARP. First off, your mortgage must be owned (or guaranteed) by Freddic Mac or Fannie Mae. You must also have obtained the mortgage on or before May 31, 2009. Only certain properties qualify so your home must be a primary residence, a single-unit second home or a one- to four-unit investment property.

In addition, you must be current on your mortgage (meaning you are not late on your mortgage payments) and have good payment history for at least the past 12 months. You must also have a current loan-to-value ratio (LTV) greater than 80%. To determine your LTV, divide the remaining balance of your mortgage by the value of your home and move the decimal two places to the right. For the most part, you probably won’t qualify if you already refinanced through HARP unless your Fannie Mae loan was refinanced in the program’s early stages. You also might not qualify if you have exceedingly bad credit, a private or lender-paid mortgage insurance or equity issues. (You can check your credit scores for free every month on Credit.com to see where you stand.)

How to Get Started

Once you determine that you qualify, it’s important to start preparing your finances. If you have mortgage insurance, find out how much, because your HARP mortgage must have the same level of coverage. It’s a good idea to get a copy of your credit report and be sure there are no problems before submitting a HARP application for approval (you can get a free annual credit report under federal law). You should then contact your mortgage servicer or a new approved servicer and inquire about HARP. You will need to provide bank statements, identification, homeowners insurance information, pay stubs, and W-2s so it’s best to be prepared. Compare rates and costs with several mortgage companies to ensure you get the best possible refinance terms.

The HARP program is slated to expire in December of this year. Remember that it might take a while to get all the information you need and to start the loan process so if you qualify for the Home Affordable Refinance Program and want to reap the benefits, the sooner you start working on it, the better.

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