Real Estate Glossary
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hazard insurance
Insurance coverage that compensates for physical damage to a property
from fire, wind, vandalism, or other hazards.
Home Equity Conversion Mortgage (HECM)
A special type of mortgage 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. Unlike traditional
home equity loans, a borrower does not qualify on the basis of income
but on
the value of his or her home. In addition, the loan does not
have to be repaid until the borrower no longer occupies the property.
Sometimes called
a reverse mortgage.
home equity line of credit
A mortgage loan, which is usually in a subordinate position, that
allows the borrower 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 a property.
home inspection
A thorough inspection that evaluates the structural and mechanical
condition of a property. A satisfactory home inspection is often included
as a contingency by the purchaser. Contrast with appraisal.
HomeKeeperSM
Fannie Mae's adjustable-rate conventional reverse mortgage, which
allows older homeowners to borrow against the value of their homes and
receive the proceeds according to the payment option they select. The
amount available is based on the number of borrowers and their ages and
the adjusted property value. Anyone 62 years or older who either owns
his or her own home free and clear or has very low mortgage debt is eligible.
homeowners' association
A nonprofit association that manages the common areas of a planned
unit development (PUD) or condominium project. In a condominium project,
it has no ownership interest in the common elements. In a PUD project,
it holds title to the common elements.
homeowner's insurance
An insurance policy that combines personal liability insurance
and hazard insurance coverage for a dwelling and its contents.
homeowner's warranty (HOW)
A type of insurance that covers repairs to specified parts of a
house for a specific period of time. It is provided by the builder or
property seller as a condition of the sale.
HomeStyle® Mortgage Loan
A mortgage that enables eligible borrowers to obtain financing
to remodel, repair, and upgrade their existing homes or homes that they
are purchasing. The financing takes the form of a conventional second
mortgage or a Federal Housing Administration (FHA) Section 203(k) first
mortgage.
housing expense ratio
The percentage of gross monthly income that goes toward paying
housing expenses.
HUD median income
Median family income for a particular county or metropolitan statistical
area (MSA), as estimated by the Department of Housing and Urban Development
(HUD).
HUD-1 statement
A document that provides an itemized listing of the funds that
are payable at closing. Items that appear on the statement include real
estate commissions, loan fees, points, and initial escrow amounts. Each
item on the statement is represented by a separate number within a standardized
numbering system. The totals at the bottom of the HUD-1 statement define
the seller's net proceeds and the buyer's net payment at closing. The
blank form for the statement is published by the Department of Housing
and Urban Development (HUD). The HUD-1 statement is also known as the "closing
statement" or "settlement sheet."
