Real Estate Terms H-L
HALF-SECTION
320 acres.
HAZARD INSURANCE
Insurance covering damage to a property caused by hazards such as fire, wind and accident.
HEADER
The framing elements above an opening such as a window or door.
HEARTH
The floor of a fireplace or the area immediately in front of it.
HEIGHT ZONING
A municipal restriction on the maximum height of any building or other structure.
HIDDEN AMENITIES
Assets of a property which contribute to its value, but are not readily apparent. Examples might include upgraded or premium building materials.
HIGHEST AND BEST USE
The most profitable and likely use of a property. Selected from reasonably probable and legal alternative uses, which are found to be physically possible, appropriately supported and financially feasible to result in the highest possible land value.
HOME EQUITY CONVERSION MORTGAGE (HECM)
Also known as a reverse annuity mortgage. It allows home owners (usually older) to convert equity in the home into cash. Normally paid by the lender in monthly payments. HECM’s typically do not have to be repaid until the borrower is no longer occupying the home.
HOME EQUITY LINE OF CREDIT
A type of mortgage loan that allows the borrower to draw cash against the equity in his home.
HOME INSPECTION
A complete examination of a building to determine its structural integrity and uncover any defects in materials or workmanship which may adversely affect the property or decrease its value.
HOME INSPECTOR
A person who performs professional home inspections. Usually, with an extensive knowledge of house construction methods, common house problems, how to identify those problems and how to correct them.
HOMEOWNER’S ASSOCIATION
An organization of home owners in a particular neighborhood or development formed to facilitate the maintenance of common areas and to enforce any building restrictions or covenants.
HOMEOWNER’S INSURANCE
A policy which covers a home owner for any loss of property due to accident, intrusion or hazard.
HOMEOWNER’S WARRANTY
An insurance policy covering the repair of systems and appliances within the home for the coverage period.
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).
HUD-1 STATEMENT
A standardized, itemized list, published by the U.S. Department of Housing and Urban Development (HUD), of all anticipated CLOSING COSTS connected with a particular property purchase.
IMPROVED LAND
Any parcel of land which has been changed from its natural state through the creation of roads, buildings or other structures.
IMPROVEMENTS
Any item added to vacant land with the intent of increasing its value or usability.
IMPROVEMENT RATIO
The comparative value of an improved piece of land to its natural, unaltered state.
INCOME APPROACH
The process of estimating the value of property by considering the present value of a stream of income generated by the property.
INCOME PROPERTY
A piece of property whose highest and best use is the generation of income through rents or other sources.
INDEPENDENT APPRAISAL
An estimation of value created by a professional, certified appraiser with no vested interest in the value of the property.
INSPECTION
The examination of a piece of property, its buildings or other amenities.
INSURABLE TITLE
The title to property which has been sufficiently reviewed by a title insurance company, such that they are willing to insure it as free and clear.
INTEREST RATE
A percentage of a loan or mortgage value that is paid to the lender as compensation for loaning funds.
INVESTMENT PROPERTY
Any piece of property that is expected to generate a financial return. This may come as the result of periodic rents or through appreciation of the property value over time.
JAMB
The side of a door frame.
JOINT TENANCY
A situation where two or more parties own a piece of property together. Each of the owners has an equal share, and may not dispose of or alter that share without the consent of the other owners.
JOISTS
Horizontal beams laid on edge to support flooring or a ceiling.
JUDGMENT
An official court decision. If the judgment requires payment from one party to another, the court may put a lien against the payee’s property as collateral.
JUDICIAL FORECLOSURE
A type of foreclosure conducted as a civil suit in a court of law.
JUMBO LOAN
A mortgage loan for an amount greater than the limits set by Fannie Mae and Freddie Mac. Often called non-conforming loans.
LALLY COLUMN
A concrete filled steel pipe used to support beams.
LATE CHARGE
An extra charge, or penalty added to a regular mortgage payment when the payment is made late by an amount of time specified in the original loan document.
LATENT DEFECTS
Any defect in a piece of property which is not readily apparent, but which has an impact of the value. Structural damage or termite infestation would be examples of latent defects.
LEASE
A contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force.
LEASEHOLD ESTATE
A type of property ”ownership” where the buyer actually has a long-term lease on the property.
LEASE OPTION
A lease agreement that gives the tenant an option to buy the property. Usually, a portion of the regular monthly rent payment will be applied towards the down payment.
LEGAL DESCRIPTION
The description of a piece of property, identifying its specific location in terms established by the municipality or other jurisdiction in which the property resides. Often related in specific distances from a known landmark or intersection.
LENDER
The person or entity who loans funds to a buyer. In return, the lender will receive periodic payments, including principal and interest amounts.
LIABILITIES
A person’s outstanding debt obligations.
LIABILITY INSURANCE
Insurance that covers against potential lawsuit brought against a property owner for alleged negligence resulting in damage to another party.
LIEN
Any claim against a piece of property resulting from a debt or other obligation.
LIFE CAP
A limit on how far the interest rate can move for an Adjustable Rate Mortgage.
LIKE-KIND PROPERTY
Any property which is substantially similar to another property.
LINE OF CREDIT
An extension of credit for a certain amount for a specific amount of time. To be used by the borrower at his discretion.
LIQUID ASSET
Any asset which can be quickly converted into cash at little or no cost, or cash itself.
LOAN
Money borrowed, to be repaid with interest, according to the specific terms and conditions of the loan.
LOAN OFFICER
A person that “sells” loans, representing the lender to the borrower, and the borrower to the lender.
LOAN ORIGINATION
How a lender refers to the process of writing new loans.
LOAN SERVICING
The processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc Typically carried out by the company you make payments to.
LOAN-TO-VALUE RATIO (LTV)
The comparison of the amount owed on a mortgaged property to its fair market value.
LOCK-IN
An agreement between a lender and a borrower, guaranteeing an interest rate for a loan if the loan is closed within a certain amount of time.
LOCK-IN PERIOD
The amount of time the lender has guaranteed an interest rate to a borrower.