Glossary of Terms
Credit Glossary
It's hard enough trying to stay on top of your credit let alone learn the industry lingo. We've compiled a glossary of industry terms to help you stay ahead of the curve when dealing with your credit, auto loans, home loans, debt, and savings.
- Hazard Insurance
- A form of insurance in which the insurance company protects the insured from specified losses, such as fire, windstorm and the like.
- High balance
- The highest amount owed on an account to date. Creditors do not always report to credit bureaus the credit limit on a revolving account. In that event, the credit bureau will use "high balance" in place of "credit limit". This can drastically affect a consumer's credit utilization score (and the lower the credit utilization, the better). As an example
- a consumer has a credit limit of $5000 on an account, a high balance of $200 and a current balance of $150. If the creditor has reported the credit limit of $5000, then the consumer's credit utilization ratio is 3%. If the creditor has not reported the credit limit and the credit bureau uses the high balance instead, the consumer's credit utilization ratio shows as 75%.
- Home equity line of credit
- A loan against the amount of equity you may have in a property.
- 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.
- Homebuyer Education Learning Program (HELP)
- An educational program from the FHA that counsels people about the home buying process, HELP covers topics like budgeting, finding a home, getting a loan, and home maintenance. In most cases, completion of the program may entitle the homebuyer to a reduced initial FHA mortgage insurance premium.
- Home inspection
- An examination of the structure and mechanical systems to determine a home's safety; makes the potential homebuyer aware of any repairs that may be needed.
- Home warranty
- Offers protection for mechanical systems and attached appliances against unexpected repairs not covered by homeowner's insurance. Coverage extends over a specific time period and does not cover the home's structure.
- Homeowner's insurance
- An insurance policy that combines protection against damage to a dwelling and its contents with protection against claims of negligence or inappropriate action that result in someone's injury or property damage.
- Housing counseling agency
- Provides counseling and assistance to individuals on a variety of issues, including loan default, fair housing and home buying.
- U.S. Department of Housing and Urban Development (HUD)
- Established in 1965, HUD works to create a decent home and suitable living environment for all Americans by addressing housing needs, improving and developing American communities and enforcing fair housing laws.
- HUD1 Statement
- Also known as the "settlement sheet," it itemizes all closing costs; must be given to the borrower at or before closing.
