Recently, I wrote about how we had refinanced our home through ING Direct. In our case, we had enough equity in our home to do a standard refinance. (Unfortunately, not everyone does.)
Those that do not have 20 percent equity in their homes may still be able to refinance though through the federal Home Affordable Refinance Program (HARP). The catch is, the mortgage must be backed by Sallie Mae or Freddie Mac. However, not everyone knows if their mortgage is backed by Fannie or Freddie, and probably assume it is not. (Bad assumption.)
How To Find Out if Sallie Mae or Freddie Mac Back Your Mortgage
You can either call or check online to see if your home is guaranteed by Fannie or Freddie. It is really easy to check, and you don’t even need your account number:
If your mortgage is owned by one of the agencies, there are still other qualifications that must be met. A few examples are as follows:
*Home must have been sold to Fannie or Freddie on or before October 31, 2009.
*Timely payments must have been made on the property for the last 12 months.
*Your mortgage servicer must participate in the HARP program.
Additional Notes About Refinancing Through HARP
*Fees may still apply when refinancing. However, it is possible that you will not need an appraisal.
*At this time, the program is only available until December, 2013.
*If you do decide to refinance, really think about the loan term you want to agree to. Maybe consider taking a 15 year loan instead of 30 year if your monthly payment will be dropping because of the reduced interest rate.
*If you find that your mortgage is guaranteed by Fannie or Freddie, call your mortgage servicer to get more details and possibly initiate the process.
So, if you are frustrated with how high your interest rate is and wish you could lower it, click on the links above and see if maybe your mortgage is actually backed by Freddie/Fannie. It only takes a minute to check, and it may just end up saving you hundreds of dollars a month if you actually are eligible for the program.
If you have actually refinanced or tried to finance through HARP (or want to discuss refinancing in general), please leave a comment!