Your interest rate is going up. Act now to save!

Your modified mortgage has an interest rate that will rise in the coming years, increasing your monthly mortgage payments.

However, if you’ve maintained an on-time payment history for 12 months and your mortgage is owned by Fannie Mae, you may be eligible to refinance under the government’s Home Affordable Refinance Program (HARP) and avoid these payment increases.

"On average, homeowners with modified mortgages save over $200 per month on their mortgage payments by refinancing with HARP."

Why should I refinance my modified mortgage loan?

You could save hundreds of dollars a month—and lock into a more affordable interest rate—by refinancing under HARP.

HARP is designed to help borrowers with loans owned by Fannie Mae or Freddie Mac who may not qualify for traditional refinancing due to a loss of home value or because they have little or no equity. See our Frequently Asked Questions for more information.

What are the benefits?

How much can you save? That depends on your individual circumstance (loan amount, taxes, monthly payment, etc.). You can get an idea of your potential savings by using our refinance calculator.

Here’s an example of how much a typical homeowner could save on a modified mortgage, with a monthly payment of $868, by refinancing with HARP:

Modified Mortgage With
Rate Increases

Sample monthly over next 3 years:
Now Year 1 Year 2 Year 3 Permanent
$868 $955 $1043 $1087 $1087
New HARP Mortgage*
Estimated monthly payment based
on low fixed interest rate:
Permanent Payment Monthly Savings**
$865 Up to $222

*Not including taxes and insurance

**Above example shows a modified mortgage loan that has interest rate adjustments (increases) over the next three years. Assumes a principal balance of $196,645 with 320 months remaining with a modified rate of 2.75% that will increase to 5.25% over 3 years.

New payment estimate based on the unpaid principal balance of the mortgage loan being refinanced into a new 30-year fixed rate loan at 4% APR. Estimate includes principal and interest only and does not include taxes, homeowner’s insurance, closing costs or other fees that may apply and vary by state or homeowner association fees, where applicable. Your actual savings may vary and will depend on the specific loan terms of your new loan (e.g., actual interest rate, APR and other factors). All loans are subject to credit approval. Fannie Mae is not a licensed mortgage lender.

Fannie Mae and Freddie Mac have adopted changes to the Home Affordable Refinance Program (HARP) and you may be eligible to take advantage of these changes. If your mortgage is owned or guaranteed by either Fannie Mae or Freddie Mac, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP. You can determine whether your mortgage is owned by either Fannie Mae or Freddie Mac by checking the following websites: http://knowyouroptions.com/loanlookup or http://freddiemac.com/mymortgage.

If the new loan is secured by your primary residence and the unpaid principal balance exceeds the property’s fair market value, the interest on the portion of the unpaid principal balance that is greater than the fair market value of your primary residence is not deductible for federal income tax purposes. You should consult a tax advisor for further information regarding the deductibility of interest and charges.

How does it work?

HARP is one of several refinancing options available to eligible homeowners. But HARP is unique—it’s the only refinance program that enables eligible borrowers with little to no equity in their homes to take advantage of low interest rates and other refinancing benefits.

HARP may be an option if:

  • To qualify, you must have a good payment history for the past 12 months. That means having no late payments in the last 6 months and no more than one 30-day late payment from 6 to 12 months ago.
  • Your home is your primary residence, 2nd home or investment property.
  • Your home value has decreased.
  • You have limited equity or your first mortgage exceeds the current market value of the home (i.e., your loan-to-value ratio must be > 80% to be eligible).
  • Your loan is owned or guaranteed by Fannie Mae or Freddie Mac. Check the Fannie Mae Loan Lookup tool.
  • Your loan was acquired by Fannie Mae or Freddie Mac on or before May 31, 2009 (this date can be found in the Loan Lookup results).

Even if you have been turned down in the past or you are “underwater” on your home (meaning you owe more than your home is worth), we urge you to reach out to your existing mortgage company today and ask about HARP. Or, find a HARP lender in your area by using our HARP lender list.

Next steps

To find out more and apply, contact your existing mortgage company (the company listed on your monthly mortgage statement).

If your mortgage company does not offer HARP or cannot help you, use our HARP lender list to find a participating lender in your area. But don’t delay—act now to see if you can start saving!

What is a modified mortgage?

With a mortgage modification, you reach an agreement between you and your mortgage company to change the original terms of your mortgage—such as payment amount, length of loan, interest rate, etc. In most cases, when your mortgage is modified, your monthly payment is reduced to a more affordable amount. Some modifications include interest rate increases after a specific period of time (usually 5 years). These rate adjustments will increase your monthly payment amount.

What is HARP?

Home Affordable Refinance Program (HARP) was introduced by the federal government in early 2009. HARP provides eligible homeowners, who may not otherwise qualify for refinancing because of declining home values, the ability to refinance their mortgage into a lower interest rate and/or more stable mortgage product. The program was enhanced in 2011 to assist more eligible borrowers to refinance.

What if I have been turned down for refinancing before? Can I still qualify for HARP?

Yes. The guidelines for HARP may have changed since you last applied. Or, your situation may have changed. It may be well worth your time to check again to see if you qualify. Contact your existing mortgage company or find a HARP lender in your area by using our HARP lender list.

What enhancements to HARP may make me eligible now?

There were several changes to HARP, but the primary enhancement removed limits on the amount that homeowners could be “underwater” (owe more on their mortgage than their home is worth). With that change, many homeowners who were not eligible may now qualify.

I’m “underwater” on my mortgage. Can I still qualify?

There is no loan-to-value maximum for HARP. This may vary by lender so if your existing lender is unable to assist you, find a HARP lender in your area by using our HARP lender list. Remember, to qualify for HARP, your loan-to-value (LTV) ratio must be greater than 80%.

Will I have to pay closing costs?

You might, but closing costs vary by state, by lender and by the size of your loan (amount financed). And in most cases, the closing costs can be rolled into your new loan so you don’t have to pay these costs out of pocket.

Is it worth refinancing with HARP?

On average, homeowners with modified mortgages are saving hundreds of dollars* per month on their mortgage payments. It may be well worth your time to apply for refinancing now. Don’t delay—act now to see if you can start saving!

What if my income is low or has decreased?

In most cases, it doesn’t matter. You still may qualify.

If I owe more on my home than it’s worth, will I have to make a down payment before I can refinance?

No, you do not need to pay more money down on your mortgage in order to refinance with HARP.

Do I have to refinance for another 30 years?

No. Shorter loan terms (15-years and 20-years) may be available so you can start paying down your mortgage quicker and building equity faster.

Is HARP the only refinance program available?

HARP is one of several refinancing options available to eligible homeowners. But HARP is unique—it’s the only refinance program that enables eligible borrowers with little to no equity in their homes to take advantage of low interest rates and other refinancing benefits.

How can homeowners find out whether their loan is owned by Fannie Mae or Freddie Mac?

If you received a letter from Fannie Mae indicating we own your loan, there is no need to check.

Other homeowners can confirm whether their mortgage is owned by either Fannie Mae or Freddie Mac by checking the following websites:

Only mortgages owned or guaranteed by either Fannie Mae or Freddie Mac are eligible for refinancing under HARP.

Where can I learn more?

There is plenty of information about HARP on the Internet, but we recommend visiting MakingHomeAffordable.gov, the official website of the Administration’s initiative that helps homeowners get mortgage relief through a variety of programs. Also, review the HARP section of KnowYourOptions.com for more information.

Making Home Affordable is a trademark of the United States Department of the Treasury. Know Your Options is a trademark of Fannie Mae.

*Average actual monthly payment savings based on total 2012 Fannie Mae HARP mortgage volume. Your monthly savings may vary based on the specific terms of the loan selected, the interest rate, APR and other factors. All loans are subject to credit approval.

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