REAL ESTATE GLOSSARY
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hazard insurance
Insurance coverage that in the event of physical damage to a
property from fire, wind, vandalism, or other hazards.
Home
Equity Conversion Mortgage (HECM)
Usually referred to as a reverse annuity mortgage, what
makes this type of mortgage unique is that instead of making
payments to a lender, the lender makes payments to you. It
enables older home owners to convert the equity they have in
their homes into cash, usually in the form of monthly
payments. 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.
home equity line
of credit
A mortgage loan, usually in second position, that allows the
borrower to obtain cash drawn against the equity of his
home, up to a predetermined amount.
home inspection
A thorough inspection by a professional that evaluates the
structural and mechanical condition of a property. A
satisfactory home inspection is often included as a
contingency by the purchaser.
homeowner's insurance
An insurance policy that combines personal liability
insurance and hazard insurance coverage for a dwelling and
its contents.
homeowner's warranty
A type of insurance often purchased by homebuyers that will
cover repairs to certain items, such as heating or air
conditioning, should they break down within the coverage
period. The buyer often requests the seller to pay for this
coverage as a condition of the sale, but either party can
pay.
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 settlement
statement
A document that provides an itemized listing of the funds
that were paid at closing. Items that appear on the
statement include real estate commissions, loan fees,
points, and initial escrow (impound) amounts. Each type of
expense goes on a specific numbered line on the sheet. The
totals at the bottom of the HUD-1 statement define the
seller's net proceeds and the buyer's net payment at
closing. It is called a HUD1 because the form is printed by
the Department of Housing and Urban Development (HUD). The
HUD1 statement is also known as the "closing statement" or
"settlement sheet."
joint tenancy
A form of ownership or taking title to property which means
each party owns the whole property and that ownership is not
separate. In the event of the death of one party, the
survivor owns the property in its entirety.
judicial foreclosure
A type of foreclosure proceeding used in some states that is
handled as a civil lawsuit and conducted entirely under the
auspices of a court. Other states use non-judicial
foreclosure.
jumbo loan
A loan that exceeds Fannie Mae's and Freddie Mac's loan
limits, currently at $227,150. Also called a nonconforming
loan. Freddie Mac and Fannie Mae loans are referred to as
conforming loans.
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