Mortgage Marvel Glossary: Terms that Begin with H

Hazard Insurance

Insurance that protects a homeowner against the cost of damages to property caused by fire, windstorms, and other common hazards. Also referred to as homeowner's insurance.

Home Affordable Modification Program (HAMP)

The U.S. program established to aid qualified home owners refinance or modify their existing loans as a way to stem foreclosure epidemics. The program launched as part of the Financial Stability Act of 2009.

Home Equity Conversion Mortgage (HECM)

A special type of mortgage that enables seniors to convert the equity in their homes into a monthly income stream. Also known as a reverse mortgage.

Home Equity Line Of Credit (HELOC)

A loan secured by real property, usually in a subordinate position, that allows the borrower to receive the loan proceeds in the form of multiple advances up to a limit that represents a maximum percentage of the borrower's equity in a property.

Home Equity Loan

A loan secured by a subordinate mortgage on one's principal residence, generally to be used for some non-housing expenditure. A traditional home equity loan provides lump-sum proceeds at the time the loan is closed.

Home Inspection

A complete and detailed inspection that examines and evaluates the mechanical and structural condition of a property. A complete and satisfactory home inspection is often required by the homebuyer. It is important to understand that a home inspection is different than an appraisal.

Home Staging

To decorate a home on the real estate market specifically to help the property sell.

Home Valuation Code of Conduct

The Home Valuation Code of Conduct was put into effect May 1, 2009 as a way to develop and improve the accuracy of the home appraisal process. Freddie Mac, the Federal Housing Finance Agency (FHFA), and the New York State Attorney General all worked together to develop the rules.

Homeowners Association (HOA)

A nonprofit association that manages the common areas of a condominium project or planned unit development (PUD). In a condominium development, the association has no ownership interest in the common elements. In a PUD, it holds title to the common elements of the project.

Homeowners Association Dues

Payments made to an association responsible for the maintenance of the common areas in a condominium or subdivision development.

Homeowner's Insurance

Insurance that protects a homeowner against the cost of damages to property caused by fire, windstorms, and other common hazards. Also referred to as hazard insurance.

Homeowner's Warranty

A type of insurance policy that covers repairs to certain parts of a home for an agreed upon period of time. It is typically provided by the contractor or seller as a condition of the sale.

Housing Ratio

A standard calculation performed by mortgage lenders to determine if a borrower qualifies for a specific loan type and amount. It is calculated by dividing the monthly housing expense (Principal, Interest, Taxes and Insurance) by the borrower's monthly gross income. Also referred to as a front-end ratio or a top ratio.

HUD

HUD, also known as the U.S. Department of Housing and Urban Development, insures home mortgage loans made by lenders to encourage financing for homeowner's with lower down payments.

HUD Median Income

Median family income for a particular county or metropolitan statistical area, as estimated by the Department of Housing and Urban Development (HUD).

HUD-1 Statement

Also referred to as the closing statement or the settlement statement. This is the document that provides line by line detail of the financial details related to a specific real estate transaction, such as the fees paid by the seller and the buyer for a purchase transaction or the fees paid by the borrower for refinances. For refinances this is sometimes known as a HUD-1A statement.

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Mortgage Glossary - H

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