Terms starting with the letter H

HOA - See Home Owners Association 

Home Equity Line of Credit (HELOC)
A revolving line of credit secured on the equity in the mortgagor's house, usable for any purpose.

Home Equity Loan
A type of loan that allows homeowners to acquire a loan in addition to their original mortgage/lien using a portion or all of the equity in their home (primary residence).  A home equity loan is a generally a second mortgage on the subject property and may be used for any personal needs (i.e., college education, debt consolidation, home improvement, etc).

Home Mortgage
A legal document that pledges the property to the lender as security for payment of a debt.

Home Owners Association (HOA)
A nonprofit organization that manages the common areas and services of a planned unit development or condominium project. In a condominium project it has no ownership interest in the common areas; in a planned unit development it holds title to common areas.

Homeowner's Insurance 
A policy that combines liability coverage and hazard insurance to protect the homeowner from weather-related damage, as well as potential liability from events that occur on the property.  Lenders require homeowners insurance coverage to protect the collateral that secures their loan.  Some homeowners insurance policies do not cover catastrophic events such as tornadoes, hurricanes or floods.  These kinds of events generally require a separate insurance policy.

Homeowners Protection Act
The Homeowners Protection Act of 1999 requires home lenders to cancel a requirement for private mortgage insurance (PMI) if the borrower has equity of at least 22% in their home (This is equal to a loan-to-value ratio of below 78%).  The law allows the borrower to request dropping PMI when equity reaches 20% of home value.  A current appraisal may be required to ascertain the home value.  For more information, see the Web site of the U.S. Dept. of Housing and Urban Development (www.hud.gov.)

Homeowner's Warranty
A type of insurance that covers repairs to specified parts of a house for a specific period of time.

Homestead Exemption
Often called "homestead" or "homestead right"; a right given by statute to a householder or head of a family to designate real estate as their homestead and said homestead is exempt, up to a stated amount, from execution by creditors.

Housing Expense - See PITI

Housing Expenses-to-Income Ratio
The ratio, expressed as a percentage, which results when a borrower's housing expenses are divided by his/her gross monthly income.

HUD - see Department of Housing and Urban Development

HUD I Settlement Statement
A form utilized at loan closing to itemize the costs associated with purchasing the home.  Used universally by mandate of HUD, the Department of Housing and Urban Development.

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.