Arbor Financial Group Marketing Engines, Inc.

Glossary of Terms

Mortgage. Real Estate & Insurance

H

Hard Cost
Land acquisition and construction costs.
Hazard Insurance
Insurance coverage that compensates for physical damage to the property by fire, wind, or other natural disasters.
Highest and Best Use
Available present use or series of future uses that will produce the highest present property value and develop a site to its full economic potential.
Holdback
(1) Portion of a loan commitment not funded until some additional requirement such as rental or completion is attained.
(2) In construction or interim lending, a percentage of the contractor's draw is held back to provide additional protection for the interim lender, often an amount equal to the contractor's profit, which is given over when the interim loan is closed.
HOME MORTGAGE DISCLOSURE ACT (HMDA)
This act requires our mortgage company to report selected information to the Federal government about each application received . HUD (U.S. Department of Housing and Urban Development) uses HMDA to detect discrimination and identify trends in lending patterns.
Homeowners Warranty (HOW) Program
Program operated by a wholly-owned subsidiary of the National Association of Home Builders through which participating builders provide home buyers with a warranty on the workmanship and materials of a home, and also warrant against major structural defects.
HOMEOWNERS' ASSOCIATION (HOA)
An association of people who own homes in a given area, formed for the purpose of improving or maintaining the quality of the area. Unpaid HOA dues can become a lien against a property.
HOMEOWNERS' ASSOCIATION DUES
A monthly payment paid to the association for the maintenance and care of the common areas.
Homestead Estate
In some states, the home and property occupied by an owner are protected by law (up to a certain amount) from attachment and sale for the claims of creditors.
Housing Expense
Principal, interest, real estate taxes and hazard insurance (PITI) and annual or monthly MIP and/or homeowners association/condo fee, when applicable.
Housing Ratio
Housing expense/effective gross income.
HUD
U.S. Department of Housing and Urban Development, established by the Housing and Urban Development Act of 1965 to supersede the Housing and Home Finance Agency. It is responsible for the implementation and administration of government housing and urban development programs.
HUD-1 (or HUD-1a)
Final statement of the actual settlement costs of the loan and all other disbursements of a loan's proceeds. A Federal requirement under RESPA. Same as SETTLEMENT STATEMENT.