Dictionary - H

Mortgage terms and definitions for home buyers, home sellers, and real estate consumers. Use the links below to find the word you're looking for.

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Hazard Insurance -
A form of insurance in which the insurance company protects the insured from certain losses, such as fire, vandalism, storms and certain other natural causes.

Home Equity Conversion Mortgage (HECM) -
Also known as the reverse annuity mortgage. This mortgage provides that instead of making payments to a lender, the lender makes payments to the individual. Older homeowners are able to convert home equity into cash this way, in the form of monthly payments. Borrowers don't qualify on the basis of income, but on the value of his or her home. Such a loan does not have to be repaid until the borrower no longer occupies the property.

Home equity line of credit -
A mortgage loan in second position that allows a borrower to obtain cash drawn against home equity, up to a certain amount.

Home Inspection -
A thorough assessment by a professional regarding the structural and mechanical condition of a property.

Homeowner's insurance -
An insurance policy that combines personal liability insurance and hazard insurance for a home and its contents.

Homeowner's warranty -
An insurance policy that is purchased by a buyer that covers certain repairs, should they be necessary over a certain period.

Housing Ratio -
The ratio of the monthly housing payment to total gross monthly income. Also called Payment-to-Income Ratio or Front-End Ratio.

HUD -
Department of Housing and Urban Development; regulates Fannie Mae and Ginny Mae.

Hybrid Financing -
The joining together of two forms of finance, such as combining a convertible loan with a participation loan, under which the lender has the right at loan maturity to convert the debt to a 50 percent ownership in the property.