Intro: If you're one of the millions of underwater homeowners who were not able to refinance your mortgage under the old Home Affordable Refinance Program ... you now have a second chance ... and with much better interest rates.
Take VO: Under the old program, if your mortgage balance was more than 25% higher than the current value of your home, you were ineligible. This had a pronounced impact in the hardest hit housing markets. Now that ceiling has been removed and millions of deeply upside down borrowers can now refinance.
Take SOT: "Removing loan-to-value cap means millions of homeowners who were on the outside looking in can now refinance at a time when mortgage rates are at record lows."
Under HARP 2.0 homeowners will see lower fees and may not need a property appraisal which can save both time and money.
The HARP program was originally set to expire in June 2012, but has been extended through the end of 2013.
One of the big hang-ups to refinancing under the original HARP was lender fears of what is known as "buyback risk," and that is the risk that Fannie Mae or Freddie Mac forces the lender to buyback the loan at a later date if any errors are found in the approval process.
Under the new HARP, lenders are relieved of some of the risk on the original loan which should make lenders less reluctant to refinance upside-down borrowers.
Be aware that a second mortgage on the property may still be a barrier to a smooth refinancing. Also, if you previously refinanced under HARP anytime since 2009, you're ineligible to do so again.
Take SOT: "The economic upside to the expanded refinancing program is that more homeowners will be able to reduce their monthly payments and get into more sustainable loans that reduce the risk of future defaults."
Tag: To get started, check with your current lender, but also be sure to shop around to make sure you're receiving the most competitive terms. You can start your search right here at Bankrate.com.