***If you DON’T have the income to qualify, this amendment to the HARP 2.0 program is an option. Read more below.***
Note – this only applies to with your servicer. For example, if your loan is serviced by a Wells Fargo, only Wells Fargo can offer the No-Income option.
No Income Verification for HARP 2.0! It Just Seems to Get Better!
Do you not have the income you once had when you purchased your home? Are you underwater on your home and can’t refinance under any of the new government programs? Well, you’re now in luck.
HARP 2 is now easier than ever to qualify!
In an effort to help HARP 2.0 reach more U.S. homeowners, Fannie Mae and Freddie Mac are changing their respective HARP mortgage guidelines. Effective September 14, 2012, qualifying for HARP become a whole lot simpler.
HARP is an acronym for Home Affordable Refinance program that allows underwater homeowners to refinance their home if they meet certain requirements.
Some of the key features of the program include:
- In order to be eligible, loans must have been purchased by Fannie Mae or Freddie Mac by May 31, 2009.
- Unlimited Loan-to-Value ratios
- Waiving the fees for borrowers that choose to take on shorter term mortgages during the refinance (some people do wish to go from a 30 Year Fixed to a 20 Year Fixed, for instance)
- You must be current on your mortgage in the last 6 months and can have 1 late in the last 12 months.
Previously, to qualify for a HARP 2 refinance, you had to have a certain Debt-to-Income (DTI). This simply means that the money that you have coming in (income) had to be greater than the money you had going out (debt). This ratio had to be at a certain level (usually around 45%) to previously qualify for the HARP 2 refinance. Lenders underwriting a HARP mortgage were required to show that at least one borrower had a verifiable source of income either via a verification of employment (VOE), self-employment, or a verification of source of non-employment income.
Now, all you need to qualify for HARP is “Money in the Bank”
Effective today, Fannie Mae and Freddie Mac are changing the way a HARP mortgage applicant’s income is evaluated.
To spruce up HARP Loan refinances, the government can rely on bank statements (checking/savings account), stocks, bonds, mutual funds, retirement accounts and etc. This shows that the government is starting to “trust” the consumer again. If you’ve been current on your mortgage for the last 6 months and have had one late payment in the last 12 months, chances are you’re not at risk of defaulting. Plus, with HARP, your monthly rate will most likely go down so you’ll be even less likely to default. You’ll need to show that you have at least one year of Principal and Interest payments and monthly tax payments in reserve from the assets you have in the bank.
This is a great move by the government to help struggling homeowners.
In addition to allowing for alternative income verification, HARP mortgage guidelines have been updated to require less paperwork from the borrower, and less scrutiny by the lender.
Note – the company we work with does not offer Stated Income HARP Refinances at this time.