If it's a player hosted game (you mentioned that someone had to be host), your lag will depend on your connection to that host. It will also depend on the other players' connections to the host. Lag compensation code is generally built into games, so if you have even one player with a poor connection, everyone will feel it. The only way to have a good game with little lag is to have everyone with good and very similar connections. This is why player-hosted games suck in general, and why you see people on forums demanding dedicated servers.