As of February 2012, the Boise real estate market experienced a 42% jump in residents who refinanced their home mortgage, compared to the previous year. This increase in refinances is largely attributed to the new HARP 2.0 program that is finally available for homeowners that have underwater mortgages.
HARP stands for Home Affordable Refinance Program, and has been around for a few years. The problem is the first version of HARP, let’s call it HARP 1.0, pretty much failed. Myriad restrictions, such as capping the amount of negative equity in your home at 25% (when, on average, the market had fallen by 40%), caused two out of every three people that applied for it to be denied; and it was especially unhelpful to places that were the worst hit by the real estate crash, such as Boise, Idaho.
So, back in the fall of 2011, President Obama bypassed congress and ordered Fannie Mae and Freddie Mac to overhaul the HARP program. Five months later, we now have HARP 2.0 available, and it appears to be the answer for a lot of homeowners.
Some industry professionals say that HARP 2.0 may equal an average savings of $375 a month for households, or the equivalent of getting a $4,500 pay raise.
Part of the eligibility requirements are that you must have been current on your mortgage for the last 6 months, have a loan less than $417,000 (for Treasure Valley residents), and your loan must have been acquired before June 1st, 2009.
I’m not a mortgage lender, I’m a real estate agent, but I can tell you that HARP 2.0 and low interest rates will not be around forever. Take the time to invest 15 minutes this week to contacting a lender to discuss HARP 2.0. The amount of money you could save is definitely worth the time investment.