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Glossary of Mortgage and Home Equity Terms

To navigate through our glossary, click on the first letter of the word you’re looking for.
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Hazard Insurance
Contract with an insurance provider that specifically covers damage to a property due to certain hazards such as fire.
High-Ratio Loan
Mortgage loan with a loan- to-value higher than 80 percent. Calculated using the loan amount divided by the lower of the sales price or appraised value.
Home Equity Line of Credit
A form of revolving credit secured by a borrower’s home. A borrower is approved for a specific credit limit and can draw on those funds up to the limit as needed during the draw period, making monthly payments as required according to the signed contract.
Home Equity Loan
A form of closed-end credit secured by a borrower’s home. The borrower receives the full loan amount once, at the beginning of the loan term, and makes monthly payments as required according to the signed contract.
Home Mortgage Disclosure Act (HMDA )
Federal legislation that requires certain types of lenders to compile and disclose data on where and to whom their mortgage and home improvement loans are being made.
Home Valuation Code of Conduct (HVCC)
The Home Valuation Code of Conduct establishes standards for solicitation, selection, compensation, conflicts of interest, and appraiser independence. It became effective May 1, 2009, for any mortgage that will be sold to Fannie Mae or Freddie Mac; Federal Housing Administration (FHA) and Federal Home Loan Bank (FHLB) mortgages are not covered in the agreement.
Homeowners' Association Dues
The fees imposed by a condominium or homeowners' association for maintenance of common areas.
Homeowner's Insurance
An insurance policy that combines liability coverage and hazard insurance.
Homeowner's Insurance Policy
A multiple-peril insurance policy available to owners of private dwellings that covers the dwelling and its contents, as well as personal liability.
Housing and Economic Recovery Act (HERA)
Federal legislation enacted in 2008 to address the subprime mortgage crisis . It was intended to restore confidence in Fannie Mae and Freddie Mac by strengthening regulations and injecting capital into the two large U.S. suppliers of mortgage funding.
Housing and Urban Development (HUD)
See Department of Housing and Urban Development.
Housing Expense Ratio
The relationship of a borrower's monthly housing payment (PITI and other housing expenses), divided by the borrower’s gross monthly income, expressed as a percentage. Also called the “top ratio.”
See Department of Housing and Urban Development.
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