Glossary (H)

Terms commonly used in the real estate and mortgage marketplace.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Hazard Insurance

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. 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.

Home Inspection

A professional inspection of a home to determine the condition of the property. The inspection should include an evaluation of the plumbing, heating and cooling systems, roof, wiring, foundation and pest infestation.

Homeowner’s Insurance

A policy that protects you and the lender from fire or flood, which damages the structure of the house; a liability, such as an injury to a visitor to your home; or damage to your personal property, such as your 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.

Homeowners’ Association

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.

Housing Expense Ratio

The percentage of your gross monthly income that goes toward paying for your housing expenses.

HUD-1 Settlement Statement

A final listing of the closing costs of the mortgage transaction. It provides the sales price and down payment, as well as the total settlement costs required from the buyer and seller.

Hybrid Loan

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.