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​H - M

Hazard insurance - Insurance protection for specified losses due to natural causes, such as fire, floods, earthquake, tornadoes, and other "acts of God"

Heir - An individual who will potentially inherit an interest in land from someone who dies

Hiatus - A gap or space between two parcels of lands that is not included in the legal description of either parcel

Home equity line of credit, or Home equity loan - A mortgage loan (usually not the primary mortgage) or line of credit which gives the property owner the option to obtain cash advances from the loan proceeds, using his or her residence as collateral, but which is not to exceed a pre-arranged amount of the owner's total equity in the property

Homeowners' association - A nonprofit association of individual owners of units in a multi-unit structure (either a planned unit development, or a condominium) that manages the common areas of that structure. In a planned unit development (PUD) project, the association holds title to the common elements, whereas in a condominium project, it holds no title to the common elements

Homeowner's insurance - An insurance policy available to residential real estate owners that protects homeowners against financial loss from fire, theft, public liability, and other risks

Homestead - Real estate that is owned and utilized as the primary family residence, protected in some states as exempt from the claims of creditors

Homestead deed - A document filed in the land records asserting a homestead exemption, protecting a variable amount of his assets (depending on which state) against the claims of creditors

Housing ratio, or Debt-to-income ratio - The percentage that results from dividing a borrower's housing expenses by his

HUD-1 statement - The document used in closing a real estate transaction (also known as a "closing statement" or a "settlement sheet") which itemizes the funds that are payable at closing, including broker commissions, loan costs, and escrow amounts, and which provides a summary of the seller's net proceeds and the buyer's net payment at closing. It is required by the US Department of Housing and Urban Development (HUD) whenever federally-related mortgages are being made on residential properties

Impound, or Reserves - The portion of a borrower's monthly payments held by the lender to pay for taxes, hazard and mortgage insurance, lease payments, and other items that will come due

Income approach - The method of estimating the value of a property by calculating its generated income

Income property - Real estate developed for the purpose of generating income

Indemnify - To provide for compensation in the case of loss or damage to property

Indemnity - The statement of terms under which loss or damage to property will be compensated

Index - A published interest rate used by lenders to compare the interest rate for an adjustable-rate mortgage (ARM) with that earned by other investments (e.g., the yield on Treasury bills, interest rate on loans from savings and loans institution, etc.), as a result of which the ARM interest rate is adjusted

Ingress - The right to enter on or over a piece of property

Insurable Title - A property title which an insurance company is willing to insure against possible claim

Installment contract, or Contract for deed - A contract for the sale of real estate whereby the buyer is in possession of the property while paying off the purchase price in periodic installments, despite the title being retained by the seller until the future date of final payment

Insured closing letter - An indemnity provided by a title insurance company to a lender, whereby the title insurance company assumes responsibility in the case that the closing agent does not fulfill the terms of the loan, or misappropriates the loan proceeds

Insured mortgage - A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (MI) so that if the borrower defaults on the loan, the insurer compensates the lender the lesser of the loss incurred or the actual insured amount

Interest rate buydown plan - An arrangement made for the initial years of a mortgage whereby the seller (or any other party) deposits money into an account that is then released toward the monthly payments on the mortgage, thereby bringing the mortgagor's interest rate down below the actual interest rate

Interest rate ceiling - The maximum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage note

Interest rate floor - The minimum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage note

Interim financing - A temporary or short-term loan, often made during the construction phase of a building project, and usually replaced by a permanent long-term mortgage

In testate - The condition of dying without leaving a will. The description of an estate without a will

Involuntary lien - A claim or charge against property placed without the consent of the property's owner

Joint Ownership Agreement - An agreement made between two or more owners of the same property, defining their rights and responsibilities (e.g. recommended in the case of married owners of property)

Joint tenancy, or Tenants by the entirety - Ownership of real estate by two or more parties held jointly for life; if one of the owners dies, the survivor(s) inherit the property without reference to the deceased's will

Judgment - A decision or decree made by a court of law

Judgment lien - A claim against the real property of a debtor, as decreed by the court

Jumbo loan, or Non-conforming loan - A loan amount that exceeds the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation; because such loan cannot be funded by these two agencies, it carries a higher interest rate

Junior mortgage, or Secondary mortgage - A mortgage whose claim to repayment is of lesser priority than another, previously recorded mortgage

Land contract - See Contract for deed

Late charge - The penalty a borrower pays when a payment is made after the due date

Lease - A written agreement between the property owner and a tenant that stipulates rent to be paid, as well as the terms under which the tenant may reside in the real estate for a designated period of time

Leasehold estate - The tenant's right to title to a property for a specific period of time whereby the tenant does not actually own the property but has a long-term lease on it

Lease option - A lease that gives the tenant the right to purchase the property, either during the lease term or at its end

Lender's Title Insurance - An insurance policy covering a lender for the loan amount, whereby the coverage declines in amount as the loan is paid off, to the point where there coverage ends when the loan is paid complet

Lessee - The individual or party who takes property upon a lease

Lessor - The individual or party who grants property upon a lease

Liabilities - An individual's financial obligations

Lien - A legal claim or charge allowed to a creditor against a debtor's property that must be paid when the property is sold to transfer title

Life estate - The right to use, occupy and own, for the duration of the life of the individual

Lifetime payment cap, or Lifetime rate cap - The limit on the amount that payments can increase or decrease over the term of an adjustable-rate mortgage (ARM)

Liquid asset - Cash, or an asset that can be readily converted into cash

Liquidated damages - The compensation predetermined by both parties to a contract to be paid to the injured party, should the other party breach the contract

Lis pendens - A legal document filed in either a federal or state court indicating that a suit is pending against property located in the county where the notice is recorded

Listing agreement - A contract by which a broker is employed by the seller to find a buyer for the seller's real estate, according to the seller's terms, and for which service, the broker is paid a commission

Listing broker - A broker whose office initiates the property listing (as opposed to the cooperating broker, whose office negotiates the sale); the listing broker and the cooperating broker may be the same per

Loan origination - The process by which a lender sets up a mortgage loan secured by real property

Loan origination fee - The fee charged by the lender to the borrower for setting up a mortgage loan, usually computed as a percentage of the total mortgage amount

Loan-to-value (LTV) percentage - The proportion of the amount of the mortgage loan against the appraised value or sales price of the piece of property being pledged as collateral; e.g., a home with appraised value of $100,000

Lock-in - A guaranteed interest rate established at the time of closing which is honored if the mortgage closes within a certain period of time, also usually establishing the number of points to be paid

Lock-in period - The time period during which the set interest rate is guaranteed to the borrower

Loss Payable Clause - A provision in an insurance policy that provides payment for any loss to two or more parties, as their interest so justifies, the two parties typically being the owner and the lender

Lot - A parcel of land with fixed boundaries as determined by a survey

Majority - The age at which an individual is legally entitled to handle his or her own affairs

Margin - The amount added to the index on an adjustable-rate mortgage (ARM) that establishes the adjusted interest rate at a given time

Market value, or Fair market value - The most likely price that a piece of property or home can realistically be sold for, and is dependent on the selling price of similar real estate in the area

Marketable title - A clear, unencumbered title, reasonably acceptable without the threat of the risk of litigation

Maturity - The date on which the principal balance of a loan, bond, or other financial commitment is due and payable

Mechanic's lien - A lien created by statute to allow unpaid contractors, laborers or suppliers who have performed work on or furnished materials for the construction of a building to recover the value of their

Metes and Bounds - Means for describing property by a set of directions and distances, when there isn't identification based on a surveyed lot number

Minor - An individual below the age at which he or she is legally entitled to handle his or her own affairs

Monument of Survey - le indications made on natural or man-made objects that indicate the boundaries of a survey

Mortgage - A legal document that pledges a property to the lender as security for the payment of a loan or debt

Mortgage broker - An individual or company that acts as an agent between borrowers and lenders for the purpose of arranging and negotiating mortgage contracts; who is paid a fee for such service

Mortgage insurance - A contract that guarantees the lender against loss caused by a mortgagor's default on a government or conventional mortgage; such insurance can be issued by a private company or by a governmen

Mortgagee - The lender in a mortgage transaction

Mortgagor - The borrower in a mortgage transaction

Multiple-listing service (MLS) - An organization of brokers who share their listing agreements with one another in order to find buyers for their properties more effectively than they could individually

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