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GLOSSARY OF REAL ESTATE TERMS (H-Z) |
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Hazard Insurance |
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Protects aganist damages caused to property by fire, windstorms and other common hazards |
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HUD |
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U.S. Department of Housing and Urban Development. |
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Lien |
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A claim by one person on the property of another as security for money owed. |
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Marketable Title |
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A title that is free and clear of objectionable liens, clouds, or other title defects. |
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Mortgage |
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Lien/claim against real property given by buyer to lender as security for borrowed money. Mortgages generally run from 10 to 30 years, during which the loan is to be paid off. |
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Mortgage Commitment |
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A written notice from the bank or other lending institution saying it will advance mortgage funds in a specified amount to enable a buyer to purchase a house. |
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Mortgage Insurance Premium |
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Payment made by a borrower to the lender for transmittal to HUD to help defray the cost of the FHA mortgage insurance program and to provide a reserve fund to protect lenders against loss in insured mortgage transactions. In FHA insured mortgages this represents an annual rate of one-half of one percent paid by the mortgagor on a monthly basis. |
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Points |
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Sometimes called “discount points.” A point is one percent of the amount of the mortgage loan. |
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Prepayment |
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Payment of mortgage loan, or part of it, before due date. |
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Principal |
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The basic element of the loan as distinguished from interest and mortgage insurance premium. |
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Quitclaim Deed |
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A deed which transfers whatever interest the maker of the deed may have in the particular parcel of land. |
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Real Estate Broker |
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A middle man or agent who buys and sells real estate for a company, firm, or individual on a commission basis. |
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Refinancing |
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The process of the same mortgagor paying off one loan with the proceeds from another loan. |
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Restrictive Covenants |
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Private restrictions limiting the use of real property. Restrictive covenants are created by deed and may “run with the land,” binding all subsequent purchasers of the land, or may be “personal” and binding only between the original seller and buyer. |
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Title Insurance |
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Protects lenders or homeowners against loss of their interest in property due to legal defects in title. |
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Title Search or Examination |
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A check of the title records, generally at the local courthouse, to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue special assessments, or other claims or outstanding restrictive convenants filed in the record, which would adversely affect the marketability or value of title. |