Glossary of commonly used terms and phrases

H

Hard Equity - High interest rate financing.
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Hard Money Lender - A Lender that customarily funds loans by private money sources and investors but not banks. Interest rates and points can be higher.
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Hard Money Lenders - Lenders that customarily fund loans by private money sources and investors but not banks. Interest rates and points can be higher.
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Hard Money Loan - An equity based loan with high interest rates and with flexible guidelines.
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Hazard Insurance - Insurance to protect the homeowner and the lender against physical damage to a property from fire, wind, vandalism, or other hazards.
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Hedging - The sale or purchase of future mortgage contracts by a mortgage banker or lender for the purpose of protecting cash transactions made at a future date.
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Heir - The person who by law receives the estate of a deceased person.
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Hereditaments - Anything that may be inherited or anything considered real property.
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Hidden Defect - An encumbrance on a title that is not apparent in the public records.
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Holdback - A portion of a loan commitment withheld until a specified event occurs, such as a rental or construction.
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Home Equity Line of Credit (heloc) - A credit line that is secured by a second deed of trust on a house. Equity lines of credit are revolving accounts that work like a credit card, which can be paid down or charged up for a pre-determined term, usually 5 years, with interest payments only. After this term, the loan becomes a fixed second and no more equity can be taken.
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Homeowner's Insurance - An insurance policy that combines liability coverage and hazard insurance.
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Homeowner's Warranty - A type of insurance that covers repairs to specified parts of a house for a specific period of time.
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Homestead - The home and property of the head of the household. Some states allow statutory exemptions that protect homestead property against the rights of creditors.
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Housing Ratio - The ratio of the monthly housing payment in total (PITI - Principal, Interest, Taxes, and Insurance) divided by the gross monthly income. This ratio is sometimes referred to as the top ratio or front end ratio.
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Housing Starts - The number of homes that construction has began on. These figures are used to determine the availability of housing, need for mortgage loans, and labor and materials, etc.
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HUD (Department of Housing and Urban Development) - A cabinet department responsible for the implementation and administration of government housing and urban development programs.
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Hybrid Investment - An investment that is a combination of both debt and equity.
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Hypothecate - Having pledged or mortgaged a security without delivery to the lender.
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