For homeowners, finding a lending company that will assist you in refinancing your home can be difficult if the mortgage on your property costs more than the market value of the home itself. When a home enters this particular state, it is referred to as ‘negative equity’ or being ‘underwater’.  To assist struggling homeowners within the United States, a federal program was established in the year 2009 called the Home Affordable Refinance Program, which is more commonly referred to as ‘HARP’, and the process of refinancing through it, ‘HARP Refinance’.

There are a few reasons why homes and assets fall into negative equity. Most often the initial mortgage was simply too much or the loan increased because the interest built faster than the homeowner could pay it off. Once a certain threshold has been breached and the homeowner defaulted, the lender would both repossess the property and sell it to alleviate the loss, or put the homeowner into debt as, while underwater, the homeowners themselves cannot sell the property.

When HARP was established, it served as a means for those who had a home value that surpassed eighty-percent of their loan (LTV) to refinance them. Through the program it was possible to obtain a lower interest rate, shorter loan terms, or even change their plan from an adjustable mortgage to a fixed-rate one, all without the homeowner’s credit score factoring in.

However, the program has certain requirements that had to be met before you could receive their help, in addition to the loan-to-value mentioned above. The first was that the mortgage belonged to Freddie Mac or Fannie Mae, both of which are government-sponsored enterprises. The second was that the homeowner must be current on their mortgage payments. The third requires that the homeowner must not have done a previous HARP Refinance on the mortgage itself, barring certain circumstances. And last, the homeowner must benefit from the loan by lowering the monthly payments or changing to a more stable payment rate.

Since the program was established there have been a substantial number of changes to it that has led to its label being changed to ‘HARP 2.0’. These new changes allowed for homeowners to refinance no matter how much the market value of their homes had dropped. To smooth out the process of refinancing, it was no longer a requirement to have their homes appraised or their loans underwritten, and allowed for the homeowners to go to any lending company in order to refinance.

For homeowners who meet the criteria and need the assistance of the program, they should not hesitate to begin the process, as the deadline for HARP Refinance is set on December 31st in the year 2015. To apply, gather all the loan and financial information related to income and mortgage statements and contact your mortgage company, if they are a certified HARP lender. The experts there will guide you through the application process and ensure that if you qualify you get the help you need in keeping your home afloat.