Glossary of Debt Related Terms

Hard Money Mortgage

A mortgage given in return for cash, rather than to secure a portion of the purchase price, as with a purchase money mortgage.

Heir

One who by law, rather than by will, receives the estate of a deceased person.

Hereditaments

(1) Anything which could be considered real property. (2) Anything which may be inherited.

Hidden Defect

An encumbrance on a title that is not apparent in the public records; for example, unknown heirs, secret marriages and forged instruments.

Holdback

Portion of a loan held back by the lender until a contingency is met. In the sale of a home insured by V.A. or F.H.A., funds may be held back to make necessary improvements to bring the property to V.A. or F.H.A. standards. The money to make "these" repairs may not be available until closing. One and one halt to double the estimated amount necessary is held back. If repairs are not made in the time allowed. these funds are used to make the repairs. In construction financing, funds are held back until, for example, a certain percentage of a subdivision has been sold, or a certain portion of a building has been constructed.

Holder In Due Course

A holder of a check or note who takes, for value and in good faith, the note before it is overdue or the check without knowledge that it has bounced, if, in fact it has.

Holding Period

The time period used by the IRS to determine along or short term capital gain. The period during which the taxpayer owns the capital asset.

Home Warranty Insurance

Private insurance insuring a buyer against defects (usually in plumbing, heating, and electrical) in the home he has purchased. The period of insurance varies and both new and used homes may be insured.

Homestead

The dwelling (house and contiguous land) of the head of a family. Some states grant statutory exemptions, protecting homestead property (usually to a set maximum amount) against the rights of creditors. Property tax exemptions (for all or part of the tax) are also available in some states. Statutory requirements to establish a homestead may include a formal declaration to be recorded.

Housing Starts

Number of houses on which construction has begun. The figures are used to determine the availability of housing, need for real estate loans, need for labor and materials, etc.

Hypothecate

To mortgage or pledge without delivery of the security to the lender.