Glossary of Terms - H
Insurance coverage that compensates for physical damage to a property from fire, wind, vandalism or other covered hazards or natural disasters.
Home Equity Conversion Mortgage (HECM):
A special type of mortgage developed and insured by the Federal Housing Administration (FHA) that enables older home owners to convert the equity they have in their homes into cash, using a variety of payment options to address their specific financial needs. This is sometimes called a “reverse mortgage.”
Home Equity Line of Credit (HELOC):
A type of revolving loan that enables a home owner to obtain multiple advances of the loan proceeds at his or her own discretion, up to an amount that represents a specified percentage of the borrower’s equity in the property.
A professional inspection of a home to determine the condition of the property conducted by a registered home inspector. At a minimum, the inspection should include an evaluation of the plumbing, heating and cooling systems, roof, wiring, foundation and pest infestation.
A policy that protects the homeowner and the lender from physical damage to the property, which damages the structure of the house; liability for accidents or actions occurring on the property, such as an injury to a visitor; or damage to personal property, such as furniture, clothes or appliances.
Homeowner’s Warranty (HOW):
Insurance offered by a seller that covers certain home repairs and fixtures for a specified period of time.
An organization of homeowners residing within a particular area whose principal purpose is to ensure the provision and maintenance of community facilities and services for the common benefit of the residents.
A statutory protection of real property used as a home from the claims of certain creditors and judgments up to a specified amount.
Housing Expense Ratio:
The percentage of gross monthly income that goes toward paying for housing expenses.
An acronym for the United States Department of Housing and Urban Development (HUD).
HUD-1 Settlement Statement:
A final listing of the closing costs of the mortgage transaction required by the Real Estate Settlement Procedures Act (RESPA) at the closing of every real estate transaction that involved mortgage financing. The HUD-1 Settlement Statement provides the sales price and down payment, as well as the total settlement costs required from the buyer and seller.
An adjustable-rate mortgage (ARM) that offers a fixed rate for an initial period, typically three to ten years, and then adjusts every six months, annually, or at another specified period, for the remainder of the term.