Mortgage Glossary
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.
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Home Equity Line of Credit 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 An examination of the construction, condition and internal systems of a home prior to purchase; satisfactory home inspection may be a condition of purchase. |
Homeowner's Insurance A broad form of insurance coverage that combines hazard insurance with personal liability protection and other coverage. |
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 a borrower's gross monthly income that is devoted to housing costs. |
HUD-1 Settlement Statement A document that lists all closing costs on a real estate purchase or refinance transaction. Also known as the "closing statement" or "settlement sheet." |




