Real Estate Glossary: Terms starting with "H" - "L"


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- H -

Hazard Insurance: Protects against damages caused to property by fire, wind-storms, and other common hazards.

Homestead: Real property owned by a person under special legal restrictions and exemptions from claims of creditors under the Constitution.

HUD: U.S. Department of Housing and Urban Development. The Office of Housing and Federal Housing Administration within HUD insures home mortgage loans made by lenders and sets minimum standards for such homes.

- I -

Implied Warranty or Covenant: A guaranty of assurance the law supplies in an agreement, even though the agreement itself does not express the guaranty or assurance.

Interest: A charge paid for borrowing money. (See mortgage note.)

Interest Rate Cap: Consumer safeguards that limit the amount the interest rate on an ARM loan can change in an adjustment interval and/or over the life of the loan. For example, if the per-period cap is 1 percent and the current rate is 5 per cent, then the newly adjusted rate must fall between 4 percent and 6 percent, regardless of actual changes in the index.

- J -

Joint Tenancy: Property held by two or more persons together with the right of survivorship. While the doctrine of survivorship has been abolished with respect to most joint tenancies, the tenancy by the entirety retains the doctrine of survivorship in content.

Judgment: The decision or sentence of a court of law as the result of proceedings instituted therein for the redress of an injury. A judgment declaring that one individual is indebted to another individual, when properly docketed, creates a lien on the real property of the judgment debtor.

- L -

Lease: A species of contract, written or oral, between the owner of real estate, the landlord, and another person, the tenant, covering the conditions upon which the tenant may possess, occupy, and use the real estate.

Lessee: A person who leases property from another person, usually the landlord.

Lessor: The owner or person who rents or leases property to a tenant or lessee; the landlord.

Lien: A claim by one person on the property of another as security for money owed. Such claims may include obligations not met or satisfied, judgments, unpaid taxes, materials, or labor.

Loan Application: An initial statement of personal and financial information required to apply for a loan.

Loan Application Fee: Fee charged by a lender to cover the initial costs of processing a loan application. The fee may include the cost of obtaining a property appraisal, a credit report, and a lock-in fee, or other closing costs incurred during the process, or the fee may be in addition to these charges.

Loan Origination Fee: Fee charged by a lender to cover administrative costs of processing a loan.

Loan-to-Value Ratio (LTV): The percentage of the loan amount to the appraised value (or the sales price, whichever is less) of the property.

Lock or Lock-In : A lender’s guarantee of an interest rate for a set period of time. The time period is usually that between loan application approval and loan closing. The lock-in protects one against rate increases during that time.

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