Advice Center

Click the letter that matches the first letter of the word you want.

Hazard Insurance - See casualty insurance.

Heat Pump - Pump used for heating and cooling; more energy-efficient than a conventional furnace for heating, but less effective for cooling. Commonly used in Oregon.

Home - Place where a person or family lives. Used in real estate to refer generally to a residential property, irrespective of its design or appeal; includes dwelling unit(s), grounds and appurtenances. See also, house.

Home Equity Conversion Mortgage (HECM) - Home loan insured by the Federal Housing Administration that allows homeowners 62 or older to convert the equity in their primary residence into cash. Operates like a reverse mortgage. The loan can be paid to the homeowner in a lump sum, a stream of payments, draws from a line of credit, or any combination of these. Borrower qualifies on the basis of the equity in his or her home, and no monthly payments by the borrower are required. The loan is repaid in a lump sum, plus accrued interest, when the home is sold or ceases to be used as a primary residence. If the proceeds of sale exceed the amount owed, the overage is returned to the borrower or paid to his estate. If the proceeds of sale are less than the amount owed, the difference is forgiven. The HECM interest rate adjusts monthly or yearly, and is tied to the weekly average yield of U.S. Treasury securities adjusted to a constant maturity of one year. See also, reverse mortgage.

Home Equity Line of Credit (HELOC) - Loan operating like a credit installment account, where the maximum credit is tied to a specified percentage of an estimate of the equity the borrower has in the property mortgaged. Borrowers obtaining HELOC financing usually already have a first mortgage, making the lien from the HELOC subordinate to the prior financing. See also, second mortgage.

Home Inspection - Examination of a residence to determine its quality or condition; includes detailed examinations of most of the structure, its systems and appliances, but is usually limited to areas that can be examined visually or without disturbing the integrity of the property or its fixtures. Also called a whole house inspection. Contrast with appraisal. See also, inspection.

Home Warranty - (1) Insurance providing protection against the cost of unexpected repairs to specified parts of a home for a specified period of time, usually one year. May be purchased by a seller for a buyer, by a buyer as part of a sale, or by a buyer after a sale. Typically, the buyer pays a small service call fee for a covered repair, and the insurer pays the rest of the repair cost. (2) Warranty offered by a builder against faults in construction of a new home. In Oregon, every new home constructed is required by law to be accompanied by a 1-year warranty.

Homeowners Association (HOA) - (1) Non-profit association of people owning homes in a given area, usually formed for the purpose of maintaining the character or quality of the area. (2) Association managing the common areas of a condominium or planned unit development. In a condominium development, the HOA has no ownership interest in the development. In a planned unit development, the HOA holds title to all of the common elements. 

Homeowners Insurance - Financial protection due to loss or damage relating to a person's home. Types of coverage available in a homeowners policy vary by insurer and policy type, but common perils covered include natural disasters, fire, theft, vandalism, personal liability and water damage. Sometimes referred to as "hazard insurance," homeowners insurance is required on virtually any real estate that is subject to a loan. Replacement cost coverage, a type of homeowners protection available in some policies, provides for the full replacement cost of property lost or damaged. Without this coverage, insurers typically pay only the estimated fair market value of the property at the time of loss. A provision in most trust deeds allows a lender to buy insurance on a borrowers behalf if the borrower fails to keep his insurance current. A lender may also require a borrower to pay funds with the monthly mortgage payment for the purpose of paying homeowners insurance. Other lenders may offer a slight interest rate discount to encourage a borrower to use this option. See also, impound account.

Homeowners Warranty - See home warranty.

HomeStyle® Mortgage - Fannie Mae residential loan program enabling eligible borrowers to buy or refinance a property and include the cost of repairs or improvements in the same mortgage; available to buyers, current owners and investors. For more information, talk to a lender, or visit the Fannie Mae WEB SITE.

House - Detached, one-family structure used as dwelling.

Housing Expense Ratio - See housing-to-income ratio.

Housing-to-Income Ratio - Percentage of a loan applicant's gross monthly income paid toward housing expenses (loan principal, interest, property taxes and homeowners insurance). Sometimes called a "front-end ratio." See also, payment-to-income ratio.

HUD - U.S. Department of Housing and Urban Development; federal agency responsible for administration of programs to support community development and increase homeownership, especially among people with lower incomes. The Federal Housing Administration, which administers the FHA loan program, is part of HUD.

HUD Median Income - Median family income for a particular county or metropolitan statistical area, as estimated by the U.S. Department of Housing and Urban Development; used by the Federal Housing Administration in calculating maximum amounts allowed on FHA loans.

HUD-1 Statement - See settlement statement.