Falling interest rates is perhaps the most important reason why people go for home loans refinance. Not only are the home loan refinance rates more attractive but sometimes also the terms. During the time of recession many financers offered never before terms to lure the borrowers and entice them to take home loans refinance. These sops included marginal application fee, adjustable interest rates, no fees for appraisal or a nominal fee for title search. This was a big incentive for many home owners to take home loans refinance apart from the lower home loan refinance rates.
This period of recession however has been very bad for the country and the country men. Many found that they just could not cope with the monthly payouts and were really concerned that the roof above their head which most people take for granted, could well be snatched away from them. The HARP refinance scheme that was put in force during this time really helped the people who were genuinely affected by the recession. HARP refinance stands for Housing Affordable Refinance Program is a government sponsored program meant to help people in financial crisis and who are not able to repay the home loan they have taken on the house that they are living in. In the HARP refinance scheme the borrower gets the benefit of lesser monthly payout and possibly a better plan such as a lower fixed interest plan. The home loan refinance rates in the HARP refinance scheme are much lower so that the larger burden of a big payout is reduced considerably.
There are of course some pre-conditions to the HARP refinance scheme which have been put in place so that there is no misuse of this program. Only those who can fulfill the conditions can avail this very pro-people program that has been implemented by the government. Some of these conditions are that the mortgage must be owned by the Government approved Finance agencies; Fannie Mae or Freddie Mac. Also the loan application and approval process must be complete before May 2009. The home-owner should not be a defaulter and must have paid all installments up-to-date in the last one year. Since home loan repayment rates are decided upon the ratio of loan to value, the criteria for HARP Refinance is that this ratio should be more than 80%.
The US Government USA hopes to end the ongoing economic crisis sooner than later so that home loans refinance will not be such a big deal and home loan refinance rates will be more inviting.