The 5 Most Important Terms about HARP Refinancing

The Home Affordable Refinance Program (HARP) has provided much-needed financial relief for thousands of Americans. People who have found that the value of their home has declined may be eligible to participate in HARP. The HARP refinancing program enables homeowners to refinance an existing mortgage so they can receive a stable and secure one.

Before you begin applying for refinancing through HARP, you should be aware of the basic terms and phrases associated with the program.

Closing Costs

Closing costs are the additional fees that borrowers must pay in order to refinance a mortgage through HARP. You should be aware of the closing costs that a lender charges for refinancing a mortgage through HARP. If you find that the closing costs exceed the savings that you will enjoy, you may want to reconsider refinancing your mortgage. Those who have larger loan amounts will likely be able to reap the benefits of HARP. If you are refinancing a mortgage with a value of $200,000 or less, you may only break even on closing costs and monthly payment savings.


The HARP refinancing program lays out several conditions for eligibility. To be eligible to participate in HARP, you must have a loan that was owned or guaranteed by Fannie Mae or Freddie Mac before May 31, 2009. You be current on your mortgage payments. The program allows borrowers to participate if they have only been late on a payment once within the past year. Even if you are not eligible for HARP, you may still be eligible for a loan modification under the Home Affordable Modification Program (HAMP).

Interest Rate

The interest rate refers to the loan fee that a lender charges for your mortgage. The interest rate may vary on an annual basis if you have an adjustable-rate mortgage. Those who have adjustable-rate mortgages frequently take advantage of HARP so that they can refinance a mortgage into a fixed-rate mortgage. A fixed-rate mortgage features a stable interest rate, so homeowners do not have to worry about payments fluctuating.


The principal refers to the total amount that you owe on a mortgage. If you choose to refinance a mortgage, you should be aware of any prepayment fees that may be associated with the new terms. A prepayment fee may be charged if you are able to pay the mortgage in full before the term of the loan.


Refinancing a mortgage means that you modify the type of loan you have. You may convert a mortgage into a different type that makes sense for your financial situation. Refinancing a mortgage will also impact other terms of the mortgage, such as the interest rate or the principal balance owed.


If you are interested in participating in HARP refinancing program, you should visit the official government website,, to find a lender that administers the program near you. The Fannie Mae and Freddie Mac websites also feature tools to help you find a HARP lender near you.

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Posted on May 18, 2023