hazard insurance
Insurance coverage that in the event of physical damage to a property from fire, wind,
vandalism, or other hazards.
Home Equity Conversion Mortgage (HECM)
Usually referred to as a reverse annuity mortgage, what makes this type of mortgage
unique is that instead of making payments to a lender, the lender makes payments to you.
It enables older home owners to convert the equity they have in their homes into cash,
usually in the form of monthly payments. Unlike traditional home equity loans, a borrower
does not qualify on the basis of income but on the value of his or her home. In addition,
the loan does not have to be repaid until the borrower no longer occupies the property.
equity line of credit
A mortgage loan, usually in second position, that allows the borrower to obtain cash
drawn against the equity of his home, up to a predetermined amount.
home inspection
A thorough inspection by a professional that evaluates the structural and mechanical
condition of a property. A satisfactory home inspection is often included as a contingency
by the purchaser.
A nonprofit association that manages the common areas of a planned unit development
(PUD) or condominium project. In a condominium project, it has no ownership interest in
the common elements. In a PUD project, it holds title to the common elements.
An insurance policy that combines personal liability insurance and hazard insurance
coverage for a dwelling and its contents.
A type of insurance often purchased by homebuyers that will cover repairs to certain
items, such as heating or air conditioning, should they break down within the coverage
period. The buyer often requests the seller to pay for this coverage as a condition of the
sale, but either party can pay.
HUD median income
Median family income for a particular county or metropolitan statistical area (MSA),
as estimated by the Department of Housing and Urban Development (HUD).
settlement statement
A document that provides an itemized listing of the funds that were paid at closing.
Items that appear on the statement include real estate commissions, loan fees, points, and
initial escrow (impound) amounts. Each type of expense goes on a specific numbered line on
the sheet. The totals at the bottom of the HUD-1 statement define the seller’s net
proceeds and the buyer’s net payment at closing. It is called a HUD1 because the form is
printed by the Department of Housing and Urban Development (HUD). The HUD1 statement is
also known as the “closing statement” or “settlement sheet.”