| 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
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| 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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