| Terms H-O |
| Hazard
Insurance |
| Also
called Homeowners Insurance, it is designed to cover damage due to
fire, wind, vandalism, theft, etc. |
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| Heavy
Industrial |
| Manufacturing
properties comprise the heavy industrial segment. Frequent uses of
such properties are: auto making, textiles, steel, chemicals, and
food processing. Typically zero to five percent office space. |
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| High-Rise
Apartments |
| A
descriptive term for an apartment building in excess of ten stories,
with underground parking, security, and a standard floor plan. |
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| Home
Warranty Insurance |
| Private
insurance insuring a buyer against defects (usually in plumbing, heating
and electrical) in the home purchased. Although the period of insurance
varies and both new and used homes may be insured. |
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| Impound
Account |
| See
Escrow |
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| Income
Ratio |
| Used
to determine qualification for mortgage loans, this ratio accesses
the allowable housing costs in relationship to a borrower's monthly
income. |
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| Index |
| Any
rate published by an independent third party (the government, the
federal bank, etc.) which serves as the measuring device used to determine
if interest rates have gone up or down over time. A wide variety of
indexes may be used with Adjustable Rate Mortgages. |
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| Initial
Note Rate |
| The
mortgage note rate at the inception of the mortgage. This rate will
change periodically according to the index and the period of time
for which it is guaranteed. |
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| Insurance
of Title |
| Insurance
as to who owns a specified interest in designated real estate, and
showing as exceptions to the insured interest the defects, liens and
encumbrances which exist as against that insured interest. |
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| Interest
Cap |
| It
is a type of consumer protection that limits the amount of interest
that a loan may be increased or decreased. Yearly interest caps and
life of loan caps are available with many loans today. |
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| Interest
Rate Buydown |
| A
technique of reducing the effective interest charged to a borrower.
It involves the payment of money to a lender to reduce the borrower's
interest rate either temporarily or permanently. This would help reduce
the buyer's payments and help him qualify for the loan. |
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| Interim
Financing |
| A
temporary construction loan made during the completion of a home or
building, which is usually replaced by a permanent loan after completion
and/or sale of the property. It also may be referred to as a short-term
loan or a bridge loan. |
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| Investment
Return |
| The
amount by which your investment gains or loses (capital appreciation/depreciation
and dividend or coupon income) over a given period of time. Usually
expressed as a percentage of the original amount invested. A five-percent
return means you earned five dollars for every $100 you invested in
the stated time period. Investment return can be measured over a variety
of timeframes (i.e., one-year, five-years, 10-years, etc.) |
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| Lien |
| A
legal claim or security instrument against property for moneys owed.
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| Life
of Loan Cap |
| Limits
the amount that a loan rate can change throughout the entire life
or term of the loan. A typical life of the loan in use today would
be a 5% interest rate cap. |
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| Light
Industrial/Assembly |
| Production
lines that assemble components produced elsewhere and light manufacturing
are based in light industrial/assembly facilities. Office space is
usually less than ten percent. |
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| Loan
Origination Fee |
| A
one-time set-up fee charged by the lender to cover the direct costs
of arranging the loan. |
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| Lock-In
Rate |
| Some
lenders will obtain a commitment from a lender to guarantee a certain
interest rate or other loan feature for a set period of time, usually
from thirty days to one year for a prepaid fee. This can protect a
borrower from interest rates rising while the application and closing
takes place. |
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| Market
Value |
| A
price estimate obtained for a particular asset if it were sold in
an arm's length transaction on the current market. For Real Estate:
The likely price a buyer is willing to pay for a property and the
likely price a seller will accept for the property in question. |
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| Mechanics
Lien |
| A
lien or claim placed on a property as security for payment for work
performed in the construction of the property and is not compensated
for that work. |
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| Mid-Rise
Apartments |
| Six
to ten story buildings that are serviced by elevators, usually have
an inner city or dense suburb, and have a limited range of unit types. |
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| Mortgage
|
| A
legal document secured against property to the lender for payment
of a debt. It is a two party agreement as opposed to the three party
agreement of a deed of trust. |
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| Mortgage
Yours |
| Individual
lenders who originate mortgages exclusively for resale in the secondary
mortgage market. These are often sold to investors such as insurance
companies and Fannie Mae. |
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| Mortgage
Insurance Premium (MIP) |
| An
insurance premium paid by the borrower on a policy that promises to
pay out the amount owing in the event that the borrower defaults.
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| Mortgage
Note |
| A
written agreement, secured by a mortgage, serves as proof of indebtedness,
and states the manner in which a loan is repaid. |
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| Mortgagee
(Lender) |
| The
lender of money to purchase real estate in a mortgage transaction.
One who holds a mortgage on real estate. |
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| Mortgagor |
| The
borrower of money to purchase real estate in a mortgage transaction |
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| Mortgage
Information Letter (MIL) |
| A
letter issued by the lender indicating the payoff balance of a loan
as well as any other requirements of loan payoff. |
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| Multiple
Listing Service (MLS) |
| The
service created and run by professionals which combines the all available
listings in an area, except For Sale By Owner (FSBO) properties, in
one directory or database. |
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| Negative
Amortization |
| When
the periodic payments on a loan are not sufficient to pay the interest
which has accumulated. This results in an increase rather than a decrease
in the amount owing on the mortgage. Also referred to as a deferred
interest. |
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| Note |
| A
legal document that obligates a borrower to repay a debt, such as
a mortgage note. |
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| Note
Rate |
| The
interest rate as set out in the mortgage that must be paid back on
the mortgage note in addition to the principal amount owed. |
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| Office/Warehouse
or Research & Development |
| Properties
that have lab facilities, offices, warehouse facilities, or personal
services such as carpentry or machine repair are typically research
and development or office/warehouse properties. Each property usually
allows a variable combination of office and other uses. |
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| Origination
Fee |
| A
fee paid to the lender for processing a loan application. The origination
fee is stated in the form of points and usually amounts to 1% of the
loan applied for. |
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