Would you like to slash your mortgage payment in half? It seems like everyone has reduced their mortgage payments with incredibly low interest rates that have been available. However, when you researched it, you found your circumstances didn’t fit the criteria most refinancing programs are bound by? Sometimes if you are upside down in your house, walking away may feel like the only option. Wait! There are government programs available to help homeowners deal with these situations. If you meet certain criteria, you can slash your mortgage payment in half. Take advantage of the lowest interest rates in decades while there is still time.
MakingHomeAffordable.gov Working to Lower Mortgage Payments
MHA, Making Homes Affordable, is a program offered by the Treasury and Housing and Urban Development Departments of the US Government. The purpose is to help homeowners stay in their homes at more affordable costs by lowering the mortgage payment. This website resource is packed with information on various ways to reduce your mortgage payment. From refinancing your current loan to complete loan modifications, this resource is there for you to reduce your mortgage payment.
HARP: One Tool to Reduce Your Mortgage Payment
HARP is one of the programs being offered and it stands for Home Affordable Refinance Program. This is a refinancing program which allows you to reduce the interest rate on your home loan. A lower interest rate could decrease your mortgage payment by half. There are stipulations:
- Homeowners have to be current in their mortgage payment and they have to have a perfect mortgage payment history for the past 12 months;
- The current loan has to be owned or guaranteed by Fannie Mae or Freddie Mac (check this website to see if your currently loan falls under these guidelines; and
- Homeowners who have a loan to value ratio of 80% or higher.
You will not be eligible for this program if any of these circumstances apply to your situation:
- You have refinanced under the HARP program any time after March, 2009;
- You have been delinquent on your mortgage payments or have any scars on your payment record during the previous 12 months; or
- Your current lender will not participate in HARP programs.
Save Your Money by Cutting your Mortgage Payment
By slashing your mortgage payment in half, you could create a savings plan that would meet other needs for your household. You could also opt to refinance at a lower interest rate in order to cut your payments in half and then continue making higher payments in order to reduce the principal faster, which we discussed in the article Home Mortgage Saving Tips.
This program is a refinancing option and although it is backed by the government, you will still be subject to pay refinancing fees such as a loan application fee and closing costs. The loan will also have to go through the underwriting process, which means there is no guarantee that you will qualify. But if you have researched other refinancing options and they didn’t fit your needs, you will want to investigate HARP.