Officials announced revisions to the HARP Program that should help more homeowners who are underwater on their mortgages and looking to refinance. The changes get rid of the previous cap for homeowners who owe up to 125 percent of their home's value. Now homeowners who are deeper in debt can access this program.  "The new changes could potentially affect 11 million Americans." says U.S. News. 

The new guidelines have been named "HARP 2.0" and it will be up to each lender to implement the new rules, says Polyana da Costa at BankRate.com.  It's estimated that only about 1 million homeowners will actually qualify for refinancing.

Usually business is slow during the holidays, but Inquiries for refinancing are up at banks across the U.S. Last week, the 30 year fixed rate fell to 4.23 percent; a year ago, it was 4.58 percent. 

"More than 1 million borrowers are expected to benefit from HARP 2.0, according to the FHFA. But many in the mortgage industry remain skeptical about that expectation and say much will depend on how lenders respond to the new guidelines." writes da Costa.

Experts say that if you are looking to refinance during the holiday season, expect delays due to higher volumes and scheduled vacations.  "Be prepared for longer lock periods (this may come at the expense of a slightly higher interest rate), and be sure to let your mortgage professional know of any travel plans that may be in place during the loan processing," says David Kuiper, a mortgage planner in Michigan.

Read more at BankRate.com

Image from TotalMortgage.com

Posted in Mortgage, Real Estate Market Conditions

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