• Banking Terms – H

    Term

    Meaning

    Hawala An Underground banking system based on trust where transaction of money can happen without actual moving or leaving record for the transaction.
    Hazard Insurance Insurance coverage that compensates for physical damage to the property caused by fire, wind, or other natural disasters like earthquakes and floods is known as Hazard Insurance.
    HDI (Human Development Index) HDI (Human Development Index) is a composite index measuring average achievement in three basic dimensions of human life–a long and healthy life, knowledge and a decent standard of living.
    Hedge  A combination of two or more securities into a single investment position for the purpose of reducing or eliminating risk. Hedge is a strategy that is used to minimize the risk of a particular investment and maximize the returns of an investment.
    HELOC HELOC stands for Home Equity Line Of Credit. It refers to a type of loan in which the borrower can get money from the lender when required within the agreed period. Borrowers home is kept as collateral for the loan. Unlike other loans the loan amount is not received by the borrower at once. It can be got in small installments against the collateral within the agreed period and amount. HELOC is like revolving credit or using credit card.
    HMDA HMDA is Home Mortgage Disclosure Act. HMDA is Home Mortgage Disclosure Act. According to this act, financial institution used to maintain data about home purchase, home purchase pre approvals etc.
    HOA (Homeowners Association) Homeowners’ association (abbrev. HOA) is the legal entity created by a real estate developer for the purpose of developing, managing and selling a community of homes. It is given the authority to manage the common amenities of the development. Most homeowners’ associations are non-profit corporations, and are subject to state statutes that govern non-profit corporations and homeowners’ associations.
    Holding Period The holding period is the time duration during which a capital asset is held/owned by an investor. The holding period is taken into consideration, while pledging the asset as a collateral.
    Home Equity Loans The Home Equity Loan is one which allows the borrower to use the equity (ownership interest represented by the money already invested in the house) in his/her home as collateral for a loan.
    Home Mortgage Disclosure Act The act requires banks to disclose mortgage lending information to verify whether the housing credit needs of the community are being met. The Act enables citizens and public officials to ascertain whether housing credit needs of local communities are being met by the lenders covered.
    Hot Money Hot money refers to the flow of funds (or capital) from one country to another in order to earn a short-term profit on interest rate differences and/or anticipated exchange rate shifts. These speculative capital flows are called “hot money” because they can move very quickly in and out of markets, potentially leading to market instability. Banks usually attract “hot money” by offering relatively short-term certificates of deposit that have above-average interest rates.
    House Brokers House Brokers are employed by brokerage houses that are members of the stock exchanges like NYSE.
    Hypothecation Here a borrower pledges collateral to secure a debt. The borrower retains ownership of the collateral, but it is “hypothetically” controlled by the creditor in that he has the right to seize possession if the borrower defaults. Normally followed in vehicle loans or finance arrangements.

     

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