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Refinancing your home can be a great opportunity to save money. When you refinance, you are trading in your current mortgage for a newer, cheaper one. Your new mortgage could save you money in one of two ways:

  1. It comes with a lower interest rate, so that you pay less per month and see the immediate benefits; or
  2. Its life span is shorter– ie. a 15-year mortgage instead of a 30-year one – which means that you make fewer (if larger) payments, and pay less interest over time.

However, if you owe the bank more than your home is worth, you might have trouble finding this kind of refinancing opportunity.


The Home Affordable Refinance Program (HARP) is an Obama-era program designed to improve the housing market after the 2009 financial crisis. The program could allow you to lower your monthly payments, shorten the terms of your loan, or obtain a fixed-rate mortgage (in many cases better than an adjustable-rate mortgage), even if you don’t have too much home equity.

Furthermore, many property appraisal requirements were waived in 2011, which could save you money on closing costs.

Are You Eligible for HARP?

In order to be eligible, you must be up-to-date on your mortgage payments, and you should not have had any late payments in the last six months.

Your loan must also be owned by Fannie Mae or Freddie Mac, and that loan should have originated before May 31, 2009. To look up whether or not your loan is owned by the Big Two, you can use the following tools to find out:

Fannie Mae

Online Loan Look-Up:

Call: (800) 7FANNIE

Freddie Mac

Online Loan Look-Up:

Call: (800) FREDDIE

For further eligibility requirements, you can visit the government website for HARP:

Getting Started 

To get started on refinancing through HARP, first determine if you’re eligible from the tools listed above. You must gather the necessary documents that prove your eligibility, including your mortgage statements and proof of income (either a paystub or income tax return).

Then, contact your mortgage lender to verify that they are an approved HARP lender. A list of HARP Lenders is available here and here

If all goes well, you could end up seeing significant savings, which you could use either as spending money or to pay your mortgage even faster.