Paul's Bellingham Blog

My thoughts on Bellingham, the Real Estate market, and more

Underwater on your home? You may be able to refinance now.

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Harp 2.0 has been rolled out over these last few months, and this program is definitely the real deal! With this new Federal program, you can be as much as 125% underwater with your mortgage and still refinance. This could be a home or condo, and also can include your investment properties.

The previous program Harp 1.0 was mostly a failed program. About 10% of those that applied ended up getting approved. This new program is designed to allow most people to qualify who have a job and decent credit.

The other nice difference with Harp 2.0 is the lenders are actually setup for it at this point. Last year if you called your bank they often did not have anyone available to help you inquire about this. Now that Harp 2.0 has been in effect for a few months, most big banks have departments setup to help you.

There is 2 programs available.

1) A basic refinance: You may have an interest rate in the 5% range, and have a loan of about $240,000 on a $220,000 home. As long as you are underwater by less then 125%, you can very possibly refinance into a rate close to 4.0%. Rates change every day but this is just an example. This can also include wrapping a 1st and 2nd loan together.

2) A loan modification: This is where they modify the principal amount owed on the loan, and not only lower your interest rate, but reduced your mortgage amount all together. It is now easier to qualify for this program, but it’s definitely not for everyone. This is for those that just lowering the interest rate will not be enough to make the home affordable for them. This is for those that this is the ONLY option, short of letting the home foreclose. Be aware also that loan modiciations may indeed effect your credit.

If you are underwater (or owe about what your home is worth) this is a unique window of opportunity to captilize on this program and on the all-time low rates. For more info go to, or look for a link to Harp 2.0 on your lenders website.

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