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mortgage loan glossary H

Use the alphabet letters below to navigate to the words in this glossary.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

- H -

Homeowners/Hazard insurance

Homeowners insurance protects you not only against property damage caused by a fire or a severe rainstorm, but can also shield you against theft, vandalism, as well as for stolen cash and personal items.

Basically, the more coverage you want, the higher your monthly premium will be. If a catastrophe does happen, homeowners insurance should cover the costs to rebuild your home. If you live in an area that's prone to natural disasters, like earthquakes and floods, you'll need separate policies.
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Home Equity Line of Credit (HELOC)

A mortgage line of credit that allows borrowers to obtain cash drawn against the equity of their home, up to a predetermined amount. Money can be accessed by writing a check or using a bank issued credit card. There are restrictions on how much can be withdrawn at one time. Interest is paid only on what is borrowed, and the credit limit is restored as the debt is repaid.
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Home Equity Loan

A loan that allows homeowners to borrow against the equity in their property.
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Home Inspection

A thorough inspection by a building professional that evaluates the structural and mechanical condition of a property. The inspection may reveal the need for repairs that the seller may have to complete before the sale of the house is finalized. A satisfactory home inspection is often included as a contingency by the buyer.
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Homeowners Association (HOA)

A non-profit association that manages the common areas of a subdivision, condominium or neighborhood, and enforces the association's rules and regulations. The property owners pay the association a fee to maintain areas owned jointly, and the association decides how to spend the fees.
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Homeowner's Warranty

A type of insurance that covers repair and replacement costs of certain items such as appliances, heating and air conditioning etc. for a specific period of time. The buyer often requests the seller to pay for this coverage as a condition of the sale, but either party can purchase the warranty.
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HUD-1 Settlement Statement

A document also referred to as a closing or settlement statement, that itemizes all charges associated with a mortgage transaction (either refinance or purchase). It gives all parties involved with the transaction a complete and final list of their incoming and outgoing funds. Some items that may appear on the statement include real estate commissions, loan fees, points and escrow amounts. It indicates how much money the borrower will bring to closing or cash back received from the closing as well as any disbursements to or monies due from the seller in purchase transactions. The HUD-1 is provided one day prior to closing so borrowers can review the fees. The final HUD-1 is signed by both the buyer and the seller. The statement is published by the Department of Housing and Urban Development (HUD).
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