As we previously discussed, the Harp 2.0 program is a government sponsored program intended to help many struggling homeowners re-finance their homes. An often overlooked aspect of Harp 2.0 is that it is also intended to help accidental landlords re-finance their investment properties and help them save thousands of dollars.
An “accidental landlord” is someone who purchased a new primary residence, but was unable to sell their prior primary residence.
Under this scenario, the initial primary residence is converted into an investment property. In other words, after you purchased your new home you could not sell your old home. As a result, you started renting the old home and became an “accidental landlord.”
The question that is often asked is under this scenario would the “investment” home/property be eligible to re-finance under Harp 2.0?
If the homeowner can qualify to re-finance under Harp 2.0, then there is a good chance that the converted investment property may also qualify. And if it qualifies, then that could potentially save the accidental landlord thousands of dollars over the life of the loan.
There are no doubt obstacles that need to be overcome in order for an accidental landlord to qualify to re-finance under Harp 2.0. But generally speaking, in order to qualify the homeowner must be current on their mortgage, with no late payments exceeding 30 days in the last six months and no more than one late payment in the last year. Under the initial Harp guidelines, loan to value limits were capped at 125%, but Harp was modified (Harp 2.0) to remove those caps and now there are no “underwater” limits. On the other hand, however, the current loan to value ratio must be greater than 80%.
But if you want to take advantage of this program you better hurry. The program is currently set to expire on December 31, 2015.
If you do qualify, the potential savings could be significant. Of course, if you do qualify, and decide that re-financing under Harp 2.0 will save you thousands of dollars, then make sure you follow these seven tips to save money on closing costs. And, of course, don’t hesitate to contact our office to discuss your options further.