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What is HARP and HAMP?

The days of great foreclosure activity are getting far behind us, nevertheless, it doesn’t imply that everybody’s properties are secure.  Financial troubles can come at any time to any one of us, and makes losing a home very real for many individuals.

Fortunately, there are many government programs that will help borrowers looking for assistance.  The Home Affordable Adjustment Program (HAMP) and Home Affordable Refinance Program (HARP) are two such initiatives that will benefit struggling borrowers.

Is HAMP a good fit for me?

HAMP was designed to help mortgage holders at risk of default. How it works: HAMP modifies the home loan terms (by extending the loan term, and bringing down the interest rate or payment forbearance) until your regularly scheduled installment squares with close to 31 percent of your month to month gross pay.  However, if the mortgage payment is beneath that 31 per cent threshold; then, you are not eligible for HAMP.

If you are presently employed and nonetheless struggling to make your monthly personal loan payments on time — or you may have ignored repayments — as a result of financial hassle, you will have to pursue a HAMP mortgage modification.

Is HARP right for me?

HARP was intended to give underwater property holders, regardless of how far underwater, the opportunity to renegotiate their home loan at a lower financing cost.

As with conventional refinance, HARP refinance requires underwriting, loan disclosures and all supporting financial documents.  If you are not behind on your mortgage payments, but still find it difficult to get any traditional refinancing because the value of your home has dropped, you will need to pursue a refinancing through HARP.

Are HARP and HAMP the same?

Both HARP and HAMP are part of the government’s Making Home Affordable program to help families get affordable housing.  To be able to qualify for each one, you will have to have a home loan that’s managed by Fannie Mae or Freddie Mac.  While they are a bit similar, HARP and HAMP do, however, serve two different audiences:

HAMP: HAMP offers an adjustment to your present loan to enable you to avoid foreclosures. To meet the requirements, your housing repayment, including primary, interest, property fees, HOA insurance and dues, must surpass 31 percent of your gross (before taxes) monthly income.  You need to likewise have a documentable hardship — a substantial decrease in income or upsurge in bills that was beyond your control.

Contact our home loan agents in San Ramon for home mortgage loan and mortgage refinancing.