HELP: Homebuyer Education Learning Program; an educational program
from the FHA that counsels people about the homebuying 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-from 2.25% to 1.75% of the home purchase price.
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.
offers protection for mechanical systems and attached appliances
against unexpected repairs not covered by homeowner's insurance;
,overage extends over a specific time period and does not cover
the home's structure. For more information, see our guide explaining
how new home warranties
Homeowner's insurance: an insurance policy that combines protection
against damage to a dwelling and Is contents with protection against
claims of negligence )r 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 homebuying.
Find a HUD-approved housing
counseling agency near you.
HUD: the U.S. Department
of Housing and Urban Development; established in 1965, HUD works
to create a decent home and suitable living environment for all
Americans; it does this by addressing housing needs, improving
and developing American communities, and enforcing fair housing
laws. For more information, see the HUD
HUD1 Statement: also known as the "settlement sheet," it
itemizes all closing costs; must be given to the borrower at or
HVAC: Heating, Ventilation and Air Conditioning; a home's heating
and cooling system.
Index: the measure of interest-rate changes that a lender
uses to decide how much the interest rate on an adjustable-rate mortgage (ARM) will change
over time. No one can be sure when an index rate will go up or down.
To help you get an idea of how to compare different indexes, the
following chart shows a few common indexes over an eleven-year period
(1994-2004). As you can see, some index rates tend to be higher
than others, and some more volatile (if a lender bases interest-rate
adjustments on the average value of an index over time, however,
your interest rate would not be as volatile). You should ask your
lender how the index for any ARM you are considering has changed
in recent years, and where the index is reported. For more information, see our guide
indexes are used in adjustable-rate-mortgages.
||This graph shows interest rates from 1994
to 2004, including the national average mortgage contract interest
rate (from 7.3% in 1994 to 5.6% in 2004), the interest rate
on one year Treasury securities (from 5.3% in 1994 to 2.7% in
2004), and the cost of funds for savings and loan associations
(from 4.3% in 1994 to 2.1% in 2004).
Inflation: the number of dollars in circulation exceeds the amount
of goods and services available for purchase; inflation results
in a decrease in the dollar's value.
Interest: a fee charged for the use of money .
Interest rate: the amount of interest charged on a monthly loan
payment; usually expressed as a percentage.
Insurance: protection against a specific loss over a period of
time that is secured by the payment of a regularly scheduled premium.
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