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GLOSSARY
Home equity line of credit
A variation of a home loan, paid as revolving debt that is backed by the portion of the home's value that the borrower owns outright. Interest paid on a home equity line of credit can be used as a deductible. This credit allows the homeowner to write checks against the equity on an ongoing basis to pay for multiple expenses rather than one big sum.
Home equity loan
A loan based on the amount of equity a homeowner has in the property.
Home inspection
A thorough examination of the house's visible structural parts and mechanical systems made before purchase.
Home ownership and equity protection act
A federal law made to discourage predatory and unfair lending in mortgages and home equity loans.
Home warranty
A policy that guarantees workmanship on construction of a home and the operations of some appliances, and covers repairs for a limited time period.
Homeowner's insurance
A policy that includes hazard coverage, loss or damage to property, as well as coverage for personal liability and theft.
Homestead
The place where one puts their home and is protected by law against forced sale to meet debt.
Household income
The total income of all members of a household. An important calculation when applying for a joint credit situation.
Housing discrimination
Illegal practice of discriminating against buyers or renters of dwellings on the basis of race, color, religion, national origin, sex, family status or disability.
Housing expense ratio (or front end ratio)
The percentage of before-tax income that goes toward a monthly house payment. The rule of thumb is that it shouldn't exceed 28.
HUD
Housing and Urban Development. The U.S. government agency established to govern federal housing and community development programs. HUD oversees the Federal Housing Administration (FHA).
HUD-1 statement
A document prepared by a closing agent with an itemized listing of closing costs including escrow deposits for taxes, commissions, loan fees, hazard insurance, and mortgage insurance payable at the closing of the property. Also called closing statement or settlement sheet.
HVAC
Heating, Ventilation and Air Conditioning; a home's heating and cooling system.
Impact fees
Fees imposed on developers when developing a new jurisdiction to help cover the costs of the “impact†the new neighborhood will have on the community. The fees are then passed onto the new property owners rather than the tax payers. These fees help cover services that residents will need, such as schools, parks, road improvements and sewerage.
Impound account
Also called an escrow account. These accounts, which are held by the lender, into which the borrower makes payments used for property taxes and insurance. Money is added to the account every time a mortgage payment is made and the lender assumes the responsibility of fund disbursement. The term is sometimes shortened to impounds.