Real Estate Glossary and Dictionary

for Tax Lien H Terms

Find the Meaning of Real Estate Terms related to Tax Liens and Tax Deeds

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Habendum Clause - The \"to have and to hold\" clause that defines the quantity of the estate granted in the deed. 

Hard money loan - A loan with a higher than normal interest rate and shorter loan period. Some investors use hard money lenders who typically charge 12%-18% for a short period of time. Most hard money lenders lend based on 65%-70% LTV and not on personal credit.

A loan that is underwritten with the condition and value of the property as the primary criteria for approval. Secondary issues may include the credit of the borrower, the ability of the borrower to repay the loan and/or the ability of the borrower to manage the property or successfully complete a rehab and sell the property. Owner occupancy, debt ratios and other issues are seldom a factor. Appraisals rather than purchase prices are used to determine value. Cash out purchases are often allowed and are another key benefit. These loans are usually approved within days and are often funded in two weeks or under with times as short as two or three days not uncommon. The cost for the benefits of speed of funding, lax underwriting and other advantages is typically a moderately high interest rate (usually low to mid teens) and high points (usually 5 to 10). (See definition of "underwriting" below.)

Hardship Conditions - The specific condition under which the homeowner was unable to make mortgage payments. Unexpected financial crisis; unforeseen situation;

Hardship letter - A letter from the borrower containing a description of the circumstances that prevented the timely payment of the mortgage. A hardship letter is often required before an agency or investor will consider extending relief.

Hardship package - A completed financial package verifying one’s income, expenses, assets, and liabilities, including an explanation of the reason one became delinquent on a mortgage or deed of trust.

Hazard insurance (fire insurance, homeowner’s insurance) - Insurance on a property against fire and other risks. A homeowner’s policy may have additional coverage for theft or liability.

Hereditaments - property, personal and real, capable of being inherited

Hiatus - A gap between two parcels of land that is not included in the legal description of either property.

Highest and Best Use - the use that is most likely to produce the greatest net return to the land and/or building over a given period.

Holder in due course - A term that describes a person or other legal entity that “holds” a negotiable instrument (usually a check or promissory note) but is not the original payee of the instrument.

Holdover Tenant - a tenant who remains in possession of leased property after the expiration of the lease term.

Home Equity Loan (HELOC) - a loan secured by equity value in the borrower’s home (home loan, home equity credit, equity credit line). In the most literal sense, this expression applies to virtually all loans (first mortgages and second mortgages, fixed and adjustable interest rates, credit lines and fully amortizing loans, etc.) placed on an owner occupied property when the loan-to-value after the Home Equity Loan closes is no higher than 100%. That is, it is a loan secured by the available equity of an owner occupied residential property.

Home Improvement Loan - A junior or second mortgage lent to the borrower based on the equity in the home. Also Home Equity Loan.

Homeowners association (HOA) - An association of homeowners in a particular subdivision, planned unit development (PUD) or condominium organized to manage the common area of the development and to enforce the association’s rules and regulations.

Homeowner's Insurance (Hazard Insurance) - insurance coverage that compensates for physical damage to a property from fire, wind, vandalism, or other hazards. The policy typically combines personal liability insurance and property hazard insurance coverage for a dwelling and its contents. See also homeowner\'s insurance.

Homeowner’s policy - An insurance policy commonly called a ‘package policy’. It covers the home and its contents in case of loss due to specific hazards specified in the policy.

Homeowners' Warranty - A special insurance policy that covers certain home repairs for a specified amount of time.

Homestead - Status provided to a homeowner’s principal residence in some states that protects the home against judgments up to specified amounts.

Homestead exemption - Available in some states, this provision causes the assessed value of a principal residence to be reduced by the amount of the exemption in order to reduce property tax.

Home warranty plan - A policy available to the buyer or seller as assurance against unanticipated home repair costs, often including repair and/or replacement of appliances, heating systems, etc.

Housing and Urban Development (HUD) - A U.S. government agency established to oversee federal housing and community-development programs.

Housing code - A local government ordinance that sets minimum standards of safety and sanitation for residential buildings.

Housing Expenses-to-Income Ratio - The ratio, expressed as a percentage, which results when a borrower’s housing expenses are divided by his/her gross monthly income. (See “debt-to-income ratio”.)

HUD 1 - A closing document required by HUD that outlines the settlement cost of a loan. The closing agent prepares this document and sends it to the buyer upon closing.  To pledge something as security without having to give up possession of it.

Hypothecation - To pledge (property) as security or collateral for a debt without transfer of title or possession. The borrower retains the right to possess and use the property while it serves as collateral to secure the debt.

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