Taxes and insurance are part of the real cost and risk of owning a mortgaged home. Use this section to understand property-tax bills, escrow collection, required property coverage, mortgage insurance, and the documents a lender or servicer may request.
The alphabetical sidebar remains the complete term list. This landing page is the recommended topic-first route through it.
- Actual Cash Value (ACV)
Insurance loss-settlement value that generally reflects replacement cost after depreciation is considered.
- Additional Interest
An additional interest is a party listed on an insurance policy because it has a financial or notice interest without necessarily being insured.
- Annual FHA Mortgage Insurance Premium
Ongoing FHA mortgage-insurance charge assessed at an annual rate and normally collected in monthly installments.
- Base Flood Elevation (BFE)
Modeled elevation reached by the flood having a 1-percent chance of being equaled or exceeded in any year.
- Borrower-Paid Mortgage Insurance (BPMI)
Conventional PMI for which the borrower pays a separately identified premium, often monthly but sometimes through another premium plan.
- Condo Insurance
Split insurance structure combining condominium association master coverage with the unit owner's HO-6 policy.
- Condo Master Policy
Association-level property insurance covering condominium buildings and common elements according to the policy and governing documents.
- Delinquent Property Taxes
Past-due property taxes that can trigger penalties, liens, closing conditions, and mortgage-servicing action.
- Dwelling Coverage
Homeowners policy component covering the main residential structure against insured physical damage.
- Dwelling Coverage Amount
Coverage A limit for the home's main structure, reviewed against rebuilding cost and mortgage property-insurance requirements.
- Elevation Certificate
FEMA form documenting a building's location, characteristics, and elevations for flood insurance, mapping, and floodplain review.
- FHA Upfront Mortgage Insurance Premium (UFMIP)
One-time FHA mortgage-insurance charge paid at closing or commonly financed into the mortgage balance.
- Flood Determination
Lender's documented check of whether a building securing a mortgage is located in a FEMA special flood hazard area.
- Flood Insurance
Separate property coverage for flood damage that may be optional by owner choice or mandatory under mortgage and federal lending rules.
- Flood Insurance Escrow
Mortgage account arrangement that collects part of a required flood premium with monthly payments and pays the insurer when due.
- Flood Insurance Rate Map (FIRM)
FEMA's official community map showing special flood hazard areas, flood zones, and other information used in mortgage flood review.
- Flood Zone
FEMA map designation classifying an area's modeled flood hazard for mapping, insurance, and mortgage review.
- Hazard Insurance for a Mortgage
Lender-facing term for property insurance against required physical-loss perils affecting the home that secures a mortgage.
- HO-6 Policy
Condominium unit-owner policy covering specified interior property and personal risks alongside the association master policy.
- Homeowners Insurance Binder
Temporary evidence that homeowners coverage has been bound while the insurer prepares the final policy documents.
- Homeowners Insurance Cancellation Notice
Insurer notice that homeowners coverage will terminate on a stated date before the policy's scheduled expiration.
- Homeowners Insurance Declarations Page
Policy summary showing the insured home, coverage limits, deductibles, premium, dates, and mortgagee information.
- Homeowners Insurance Deductible
Claim amount the homeowner must absorb before covered property insurance pays, subject to the policy's terms and loss type.
- Homeowners Insurance Effective Date
Date and time homeowners coverage begins, used to verify protection at closing and continuity during policy changes.
- Homeowners Insurance Escrow
Mortgage escrow collection and servicer payment of homeowners insurance premiums as part of the borrower's total monthly payment.
- Homeowners Insurance for a Mortgage
Property insurance a mortgage lender requires to protect the home, with broader policy coverage that also serves the homeowner.
- Homeowners Insurance Lapse
Actual or apparent gap in required homeowners coverage that can trigger servicing notices and force-placed-insurance action.
- Homeowners Insurance Nonrenewal Notice
Insurer notice that homeowners coverage will not continue after the current policy period expires.
- Homeowners Insurance Policy Period
Span from a homeowners policy's effective date through its expiration date during which coverage is in force.
- Homeowners Insurance Premium
Price of homeowners coverage that affects closing cash, escrow collection, and the borrower's total monthly housing payment.
- Homeowners Insurance Renewal
Continuation of homeowners coverage into a new policy period with updated dates, premium, limits, and mortgage information.
- Homestead Exemption
Property-tax benefit for eligible owner-occupied homes that may affect tax bills and escrow estimates.
- Lender-Paid Mortgage Insurance (LPMI)
Private mortgage insurance paid to the insurer by the lender, with the cost usually recovered through a higher rate or other loan pricing.
- Letter of Map Amendment (LOMA)
FEMA letter establishing that an existing structure or parcel on natural ground is not located in the mapped special flood hazard area.
- Loss Assessment Coverage
HO-6 coverage that may pay certain association assessments arising from a covered loss or master-policy deductible.
- Loss Payee
Party designated to receive or participate in insurance proceeds for covered property in which it has a financial interest.
- Mandatory Flood Insurance Purchase
Federal requirement for adequate flood coverage on certain mortgage-secured buildings located in special flood hazard areas.
- Millage Rate
Property-tax rate stated in mills, with each mill generally equal to one dollar per $1,000 of taxable value.
- Monthly Mortgage Insurance
Mortgage-insurance premium collected with each monthly payment rather than mainly through an upfront or pricing-based structure.
- Mortgage Insurance
Insurance that reduces lender risk on higher-leverage mortgages while adding an upfront cost, monthly cost, or pricing tradeoff for the borrower.
- Mortgage Insurance Premium (MIP)
FHA mortgage-insurance cost made up of an upfront premium and an ongoing annual premium normally collected monthly.
- Mortgagee Clause
Property-insurance provision identifying the mortgage holder and protecting its secured interest in the insured home.
- Named Insured
Person or entity identified as an insured policyholder with rights and duties under the homeowners insurance contract.
- National Flood Insurance Program (NFIP)
FEMA-administered program providing flood insurance and floodplain-management standards in participating U.S. communities.
- Ordinance or Law Coverage
Property coverage for specified demolition, undamaged-property loss, and increased construction costs caused by current building rules.
- PITI
PITI stands for principal, interest, taxes, and insurance, a common shorthand for the core monthly housing payment components.
- PMI Cancellation and Automatic Termination
Rules and servicing steps for ending eligible borrower-paid conventional PMI through request, automatic termination, or final termination.
- Private Flood Insurance
Flood coverage issued by a private insurer and evaluated by the mortgage lender under federal, agency, and investor acceptance rules.
- Private Mortgage Insurance (PMI)
Private insurance used on certain conventional mortgages to reduce lender risk when the borrower has a smaller equity contribution.
- Proof of Homeowners Insurance
Evidence showing a mortgage lender or servicer that required property coverage exists and matches the home, borrower, dates, and loan.
- Property Tax Abatement
Approved reduction or credit that lowers a property's tax bill and can change mortgage escrow projections.
- Property Tax Assessment
Local government valuation process used to establish a property's assessed or taxable value for property-tax purposes.
- Property Tax Assessment Appeal
Formal challenge to a property's assessed value or tax classification that may change future bills and escrow.
- Property Tax Bill
Official statement of property taxes due, used for mortgage qualification, closing adjustments, and escrow servicing.
- Property Tax Certificate
Jurisdiction-specific property-tax record that may confirm payment status or represent an interest in delinquent taxes.
- Property Tax Escrow
Mortgage-servicing arrangement that collects part of expected property taxes with each payment and pays bills when due.
- Property Taxes
Property taxes are local taxes assessed on real estate that borrowers often pay through the monthly mortgage escrow process.
- Recoverable Depreciation
Recoverable depreciation is an amount withheld from an initial replacement-cost claim payment that may be paid after repair or replacement conditions are met.
- Replacement Cost Value (RCV)
Insurance estimate or loss-settlement basis using current repair or replacement cost without ordinary depreciation deduction.
- Single-Premium Mortgage Insurance
Conventional mortgage-insurance plan funded with one lump-sum premium at closing instead of a standard monthly premium.
- Special Assessment
Targeted public or association charge that can affect closing funds, title review, qualification, or future housing cost.
- Special Flood Hazard Area (SFHA)
FEMA-mapped area subject to the 1-percent-annual-chance flood and central to mandatory mortgage flood-insurance rules.
- Special Form Property Insurance
Property insurance form covering direct physical loss unless the cause is excluded, often used to satisfy mortgage-investor peril requirements.
- Split-Premium Mortgage Insurance
Conventional PMI plan that combines a smaller premium at closing with a reduced recurring monthly premium.
- Standard Flood Hazard Determination Form (SFHDF)
Standard federal form lenders use to document a mortgaged building's FEMA map and special flood hazard status.
- Supplemental Property Tax Bill
Additional local property-tax bill issued outside the regular bill after a qualifying value or ownership event.
- Tax Collector
Local authority that receives property taxes and confirms payment status for closing and escrow servicing.
- Tax Installment
Scheduled portion of a property-tax obligation that affects escrow timing, prorations, and closing calculations.
- Tax Proration
Closing credit or debit that allocates a property-tax period between buyer and seller according to ownership timing.
- Walls-In Condo Coverage
Informal condo-insurance term for interior unit property that falls outside or alongside the association master policy.
- Windstorm Insurance for a Mortgage
Required property coverage for wind and named-storm damage when the primary homeowners policy includes, limits, or excludes that peril.