Glossary of Mortgage Terms

A hard money loan is a short-term loan backed by assets that private investors or lending companies give out instead of banks. These loans are often used for real estate investment projects that need money quickly.

Hazard insurance is the part of a homeowners insurance policy that covers damage to your home’s physical structure from events like fire, windstorms, hail, lightning, and theft.

A homeowners association (HOA) is a private group that runs a neighborhood by charging homeowners fees and making sure that everyone follows the rules that are meant to keep property values and common areas in good shape.

Homeowners pay a homeowners association (HOA) fee on a regular basis to cover the costs of maintaining shared community spaces, providing amenities, paying for insurance, and running the association.

An HOA special assessment is a one-time fee your homeowners association charges on top of regular dues, usually to cover a major repair or unexpected expense the existing budget can't handle.

Most mortgage lenders require a written opinion from a licensed professional about the current market value of a home before they will approve a purchase or refinance loan.

Home appreciation is the rise in a home's market value over time. This can happen because of things like supply and demand, location, the economy, and improvements made to the home.

Home equity is the part of your house that you really own. To figure it out, you take the current market value of your home and subtract what you owe on your mortgage and any other liens on the property.

A home equity line of credit (HELOC) is a type of credit line that is backed by the value of your home. It lets you borrow, pay back, and borrow money again up to a certain amount during a set draw period, usually at a variable interest rate.

A home equity loan is a second mortgage with a fixed interest rate that lets homeowners borrow a lump sum of money based on the difference between the current market value of their home and the amount they still owe on their mortgage.