Government Help

• You might not have the required 20 percent equity if your home has lost value since you purchased it. You might not have the right amount of equity, either, if you haven't owned your home for several years. That doesn't mean that you can't take advantage of low mortgage interest rates. The government's Home Affordable Refinance Program, better known as HARP, is designed to help homeowners with low or no equity qualify for refinances. Under the program, the government provides financial bonuses to lenders who agree to refinance the mortgage loans of homeowners who don't have 20 percent equity in their residences.
  
  

Contact Your Lender

• Unlike traditional refinances, you must work with your existing lender to participate in HARP. To find out if your lender is participating -- most across the country are -- call and ask. If your lender is participating, it can then walk you through the process of qualifying for a HARP refinance.
  
  

HARP Guidelines

• To qualify for a refinance through HARP, you'll have to meet certain requirements set up by the federal government. First, you can only participate in HARP if you want to refinance a loan attached to home that has just one to four living units. Anything more and you won't qualify for such a refinance. You must also be current on your existing loan payments. This means that you haven't been more than 30 days late on any mortgage payment in the last 12 months. Finally, you must have a home loan owned or guaranteed by Freddie Mac or Fannie Mae.
  
  

The Process

• Once you and your lender determine that you do qualify for a refinance through HARP, you'll still have to go through the underwriting process. Just because you meet the initial HARP requirements doesn't mean that your lender will approve your refinance request. During the refinance process, you'll have to submit copies of the paperwork that proves your gross monthly income, monthly debt obligations and employment status. You'll also have to agree to have a real estate appraiser come out to determine the value of your home. HARP is available to homeowners who owe as much as 125 percent of the value of their home. If your home is worth $100,000, for example, you can qualify for a refinance if you owe as much as $125,000 on your loan.