coverage that compensates for physical damage to a property
from fire, wind, vandalism, or other hazards.
Equity Conversion Mortgage (HECM)
A special type of mortgage that enables older home owners
to convert the equity they have in their homes into cash,
using a variety of payment options to address their specific
financial needs. Unlike traditional home equity loans, a
borrower does not qualify on the basis of income but on
the value of his or her home. In addition, the loan does
not have to be repaid until the borrower no longer occupies
the property. Sometimes called a reverse mortgage.
equity line of credit
A mortgage loan, which is usually in a subordinate position,
that allows the borrower to obtain multiple advances of
the loan proceeds at his or her own discretion, up to an
amount that represents a specified percentage of the borrower's
equity in a property.
A thorough inspection that evaluates the structural and
mechanical condition of a property. A satisfactory home
inspection is often included as a contingency by the purchaser.
Contrast with appraisal.
Fannie Mae's adjustable-rate conventional reverse mortgage,
which allows older homeowners to borrow against the value
of their homes and receive the proceeds according to the
payment option they select. The amount available is based
on the number of borrowers and their ages and the adjusted
property value. Anyone 62 years or older who either owns
his or her own home free and clear or has very low mortgage
debt is eligible.
A nonprofit association that manages the common areas of
a planned unit development (PUD) or condominium project.
In a condominium project, it has no ownership interest in
the common elements. In a PUD project, it holds title to
the common elements.
An insurance policy that combines personal liability insurance
and hazard insurance coverage for a dwelling and its contents.
A type of insurance that covers repairs to specified parts
of a house for a specific period of time. It is provided
by the builder or property seller as a condition of the
A mortgage that enables eligible borrowers to obtain financing
to remodel, repair, and upgrade their existing homes or
homes that they are purchasing. The financing takes the
form of a conventional second mortgage or a Federal Housing
Administration (FHA) Section 203(k) first mortgage.
The percentage of gross monthly income that goes toward
paying housing expenses.
Median family income for a particular county or metropolitan
statistical area (MSA), as estimated by the Department of
Housing and Urban Development (HUD).
A document that provides an itemized listing of the funds
that are payable at closing. Items that appear on the statement
include real estate commissions, loan fees, points, and
initial escrow amounts. Each item on the statement is represented
by a separate number within a standardized numbering system.
The totals at the bottom of the HUD-1 statement define the
seller's net proceeds and the buyer's net payment at closing.
The blank form for the statement is published by the Department
of Housing and Urban Development (HUD). The HUD-1 statement
is also known as the "closing statement" or "settlement