California Home Affordable Refinance Program: A Lifeline for Homeowners

If you are a homeowner in California, you may have heard about the Home Affordable Refinance Program (HARP). This program was created by the federal government to help homeowners who are underwater on their mortgages refinance and take advantage of lower interest rates. In this article, we will take a closer look at the California Home Affordable Refinance Program and how it can benefit you.

What is the California Home Affordable Refinance Program?

The California Home Affordable Refinance Program, also known as CalHARP, is a state-run program that is designed to help homeowners who are underwater on their mortgages refinance their homes. This program is available to homeowners who have a loan-to-value (LTV) ratio of more than 80% and who meet certain eligibility requirements.

How Does CalHARP Work?

The CalHARP program allows eligible homeowners to refinance their mortgages to a lower interest rate, regardless of how much they owe on their homes. This can help homeowners save money on their monthly mortgage payments and reduce their overall debt. The program also allows homeowners to refinance to a shorter-term mortgage, which can help them pay off their loan more quickly.

Who is Eligible for CalHARP?

To be eligible for the CalHARP program, homeowners must meet the following requirements:

  • The homeowner must have a loan-to-value (LTV) ratio of more than 80%.
  • The homeowner must be current on their mortgage payments.
  • The homeowner must have a FICO credit score of at least 620.
  • The homeowner must have a loan that is owned or guaranteed by Fannie Mae or Freddie Mac.
  • The homeowner must have taken out their loan before May 31, 2009.
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What are the Benefits of CalHARP?

The CalHARP program offers several benefits to eligible homeowners:

  • Lower Interest Rates: The program allows homeowners to refinance to a lower interest rate, which can save them money on their monthly mortgage payments.
  • Shorter-Term Mortgages: The program allows homeowners to refinance to a shorter-term mortgage, which can help them pay off their loan more quickly.
  • No Appraisal Required: The program does not require an appraisal, which can save homeowners time and money.
  • No Out-of-Pocket Costs: The program does not require any out-of-pocket costs, which can make it more affordable for homeowners.

How to Apply for CalHARP

To apply for the CalHARP program, homeowners should contact their mortgage servicer or lender. They will need to provide information about their current loan and their financial situation. The lender will then determine if the homeowner is eligible for the program and will work with them to complete the refinancing process.

Conclusion

The California Home Affordable Refinance Program can be a lifeline for homeowners who are struggling to make their mortgage payments. By refinancing to a lower interest rate or a shorter-term mortgage, homeowners can save money and reduce their overall debt. If you are eligible for the CalHARP program, you should consider applying to take advantage of its many benefits.