H

Hard-Money Mortgage -
Cash loan to a borrower. top of page

Hazard Insurance -
A form of insurance in which the insurance company protects the insured from certain losses, such as fire, vandalism, storms and certain other natural causes. top of page

Home Equity Conversion Mortgage (HECM) -
Also known as the reverse annuity mortgage. This mortgage provides that instead of making payments to a lender, the lender makes payments to the individual. Older homeowners are able to convert home equity into cash this way, in the form of monthly payments. Borrowers don't qualify on the basis of income, but on the value of his or her home. Such a loan does not have to be repaid until the borrower no longer occupies the property. top of page

home equity line of credit -
A mortgage loan in second position that allows a borrower to obtain cash drawn against home equity, up to a certain amount. top of page

Home Inspection -
A thorough assessment by a professional regarding the structural and mechanical condition of a property. top of page

homeowner's insurance -
An insurance policy that combines personal liability insurance and hazard insurance for a home and its contents. top of page

homeowner's warranty -
An insurance policy that is purchased by a buyer that covers certain repairs, should they be necessary over a certain period. top of page

Housing Ratio -
The ratio of the monthly housing payment to total gross monthly income. Also called Payment-to-Income Ratio or Front-End Ratio. top of page

HUD -
Department of Housing and Urban Development; regulates Fannie Mae and Ginny Mae. top of page

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. top of page

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I

Index -
A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments (such as one- three-, and five-year U.S. Treasury Security yields, the monthly average interest rate on loans closed by savings and loan institutions, and the monthly average Costs-of-Funds incurred by savings and loans), which is then used to adjust the interest rate on an adjustable mortgage up or down. top of page

Interest -
Consideration in the form of money paid for the use of money, usually expressed as an annual percentage. Also, a right, share, or title in property. top of page

Interest Only -
A term loan arrangement calling for payments of interest only, not to include any amount for principal. top of page


Interest Rate -
The percentage of an amount of money that's paid for its use over a specified time period. top of page

Interest Rate Swap -
A transaction between two parties, in which each agrees to exchange payments tied to different interest rates or indices for a specified period of time. top of page

Intermediate-Term Mortgage -
A mortgage loan with a stated maturity at the time of purchase that it is equal to or less than 20 years.
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J

Judicial Foreclosure -
A court procedure used by lenders to secure clear title to a property under a defaulted real estate loan. top of page

Jumbo Loan -
A loan for $322,700 or more in the continental United States (Alaska and Hawaii limits are higher). These limits are set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate. top of page