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The answer to this question is simple. You will have a lower interest rate. If not why would you choose to refinance? For a HARP refinance to be attractive you would probably need to have a mortgage interest rate of 6% to 8%. Some lenders are offering fixed interest HARP loans at 2.7% to 3.3%. However, the only way to learn how much lower an interest rate you could get with a HARP loan is to contact your mortgage company or a potential lender, and fill out an application. If it's not significantly less than your current interest rate don’t bother to refinance.
Do the math
While you could save money with a HARP loan it's important to do the math. For example, if you have a $125,000 loan at 6.5% interest and got a HARP loan at 5.375% you would only save about $90 a month. And your closing costs would probably be around $3200, which means it would take you almost three years to recoup that $3200. As you can see from this example it would probably not pay to get a HARP loan unless you owed significantly more than $125,000 on your mortgage or could reduce your interest rate substantially.
If you're underwater or upside down
If you're underwater – meaning that you owe more on your home then it's worth – or upside down there is HARP 2.0. It's designed to help people like you refinance their mortgages. And it's especially good for people that are unable to find help elsewhere. HARP 2.0 is like HARP but with two key differences. First it will allow you to refinance if you have mortgage insurance and second the new mortgage lender is relieved of the responsibility for anything that happened on your first loan. This is due to the fact that there was massive fraud on the underwriting of many mortgages. If this is what happened to you, the new lender is not responsible. This puts more lenders in position to help.
The eligibility requirements for HARP 2.0 are the same as for the original HARP (as listed above).
Finally, here’s a two-minute video, courtesy of National Debt Relief, with more details about HARP 2.0.