The real estate business pretty much has its own dictionary. There’s a lot of jargon and slang associated with being a real estate agent, and though some of it might seem silly or nonsensical at first glance, much of it is actually pretty serious.
For real estate agents, the short acronyms can actually contain some of the most vital legal information in the business.
HARP is one perfect example of this point.
Though HARP, which stands for Home Affordable Refinancing Program, might just seem like an instrument with strings, in the business of buying and selling homes, it actually refers to something much bigger.
The Home Affordable Refinancing Program is a federal program in the USA, with the Federal Housing Finance Agency putting HARP program into effect in March 2009. Its original intent was actually to help underwater or near underwater homeowners. It’s an affordable refinance program used for those whose mortgage payments are current, but who cannot refinance due to the state of the housing market.
To put it summarily, the HARP program helps those in need or at risk because of their home to lower their monthly mortgage payment by lowering their interest rate in many cases. It seeks to close the gap in the LTV ratio, providing a balance in the ratio of the loan to the value of the assets purchased.
Its purpose may seem a little complex, but the reasons that it’s beneficial and the qualifying factors are a bit more straightforward.
Affordable refinance through HARP is beneficial for a few different reasons.
It lowers your monthly payment, reduces your interest rate, means that you’ll get a fixed-rate mortgage that won’t change over time, helps build equity faster, and saves both time and money.
There are some qualifying factors, though.
To qualify for HARP, the mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae, it must have been acquired before May 31, 2009, the homeowner must not have used HARP previously to refinance a mortgage, the homeowner must be current on their mortgage payments for the last six months, the LTV must be greater than 80%, and finally, the homeowner must benefit from the loan by either lower monthly payments or a movement to a more stable rate/product.
These slang terms might sound funny, but their explanations certainly provide a whole lot more to them than just a few letters. Looks like you’ve got a dictionary to read.